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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. What does CDO stand for?
(a) Calculated debt options.
(b) Common debt obligations.
(c) Collateralized debt obligations.
(d) Client debt options.

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

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

4. With the creation of ______, mortgage companies became inspired to grow quickly and offer a great many loans to customers.
(a) Mortgage bonds.
(b) Moody's.
(c) Standard & Poor's.
(d) FICO Scores.

5. 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) Deutsche Bank.
(b) Oppenheimer and Co.
(c) Capital One Financial.
(d) Cornwall Capital Management.

Short Answer Questions

1. In what year did Steve Eisman stop working as an analyst and start his own hedge fund?

2. Michael Burry could not bet against mortgage bonds in the same way he could other bonds because he could not short houses, only what?

3. After Eisman's published report, there were no more public subprime mortgage lenders by what year, as described in Chapter 1?

4. What is a division of The McGraw-Hill Companies that publishes financial research and analysis on stocks and bonds?

5. Where did Michael Lewis grow up?

Short Essay Questions

1. How did Charlie Ledley's first investment pay out? What was the company's worth?

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

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

4. How are tranches differentiated in mortgage bonds?

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

6. Who was the only person at AIG FP to investigate the company's CDSs in Chapter 4? What did he discover?

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

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

9. What intrigued Steve Eisman about CDSs in Chapter 3?

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

(see the answer keys)

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