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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 work as a bond salesman after earning his Masters degree in Economics?
(a) Paris.
(b) Berkeley.
(c) Stockholm.
(d) London.

2. What does CDS stand for?
(a) Consumer data system.
(b) Credit default swap.
(c) Commercial data systems.
(d) Credit foreclosure systems.

3. What is often referred to as a form of insurance that protects a lender if a borrower of capital defaults on a loan?
(a) Credit default swap.
(b) FICO Scores.
(c) Collateral debt obligation.
(d) Tranches.

4. What company did Charlie Ledley and Jamie Mai investigate because of some legal troubles, deciding that the legal trouble would blow over and their low stock would soon rally in Chapter 5?
(a) Cornwall Capital Management.
(b) Deutsche Bank.
(c) Capital One Financial.
(d) Oppenheimer and Co.

5. In Michael Burry's first credit default swap, what was the rate of each bond purchased?
(a) $1 million.
(b) $7 million.
(c) $3 million.
(d) $10 million.

Short Answer Questions

1. 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?

2. With whom did Michael Burry make his first credit default swap?

3. In Chapter 3, soon all the CDSs AIG FP sold consisted primarily of what?

4. On what date did the head of the International Monetary Fund warn that the world financial system was teetering on the "brink of systemic meltdown"?

5. Michael Burry lost his left eye due to what as a toddler?

Short Essay Questions

1. What did Vincent Daniel discover about the ratings companies in Chapter 4?

2. How did Charlie Ledley enter the bond market in Chapter 5?

3. How does the author describe his impressions of Wall Street when he began working there in Chapter 1?

4. What "expert" did Greg Lippmann bring to speak with Steve Eisman in Chapter 3? Why?

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

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

7. What did Steve Eisman's team conclude after analyzing the mortgage data in Chapter 4?

8. How did Steve Eisman come to work for Oppenheimer Co.? How is he described?

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

10. What did Goldman Sachs begin doing with their bottom tranches in Chapter 3?

(see the answer keys)

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