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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Where did Michael Lewis earn his Masters degree in Economics?
(a) The Chicago School of Economics.
(b) The New York School of Economics.
(c) The London School of Economics.
(d) The Paris School of Economics.

2. What does AIG FP stand for?
(a) American International Group Financial Products.
(b) American Investment Group Financial Portfolios.
(c) American Investment Group Financial Portfolios.
(d) American International Group Fiscal Products.

3. At what age was Michael Lewis when he was shocked that Wall Street would allow him to buy and sell stocks, as described in the Prologue?
(a) 18.
(b) 17.
(c) 24.
(d) 15.

4. Who agreed to a $5 million dollar deal with Michael Burry in Chapter 2?
(a) Bank of America.
(b) Cornwall Capital Management.
(c) Scion Capital
(d) Goldman Sachs.

5. What is a legal document that institutions and businesses use to describe the securities they are offering for participants and buyers?
(a) Syllabus.
(b) Contract.
(c) Terms of Service.
(d) Prospectus.

Short Answer Questions

1. What did Michael Burry study in college?

2. What is the name of the investment group Steve Eisman formed after quitting his job as a bond analyst?

3. What Chinese national who came in second in a math competition in China accompanied Greg Lippmann in Chapter 3?

4. What is often referred to as a form of insurance that protects a lender if a borrower of capital defaults on a loan?

5. By what year had Steve Eisman gathered a group of investors around himself filled with people who believed as he did that no one on Wall Street knew what they were doing, as described in Chapter 1?

Short Essay Questions

1. What did Ledley and Mai discover about CDOs and CDSs in Chapter 5?

2. How are tranches differentiated in mortgage bonds?

3. What led Steve Eisman to open his own hedge fund?

4. What patterns did Steve Eisman's team discover in mortgage trading in Chapter 4?

5. How is Mike Burry described in Chapter 3? What did he study before entering the stock market?

6. What obstacles did Cornwall Capital Management face as a beginning business?

7. How did Cornwall Capital Management secure an ISDA? What did this mean for the company?

8. Discuss Steve Eisman's work with mortgage bonds. How were mortgage bonds divided?

9. How did Greg Lippmann go about finding investors in Chapter 3?

10. What report did Steve Eisman publish in 1997? Who assisted him?

(see the answer keys)

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