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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. In Chapter 5, Ledley and Mai bought multi-million dollar triple-A CDOs rather than the triple-B CDOs who had purchased?

2. What mortgage lender did an Oppenheimer banker obtain information on from Steve Eisman in Chapter 1?

3. Gene Park worked in offices where in Chapter 4?

4. How old was Charlie Ledley when he moved to California to create a hedge fund?

5. In Michael Burry's first credit default swap, what was the rate of each bond purchased?

Short Essay Questions

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

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

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

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

5. How are tranches differentiated in mortgage bonds?

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

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

8. What did Steve Eisman discover about Household Finance Corporation in Chapter 1?

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

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

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Discuss Eisman and Daniel's 1997 report and its conclusions about subprime mortgage lending. How did the market change after the report's publication?

Essay Topic 2

Discuss AIG FP and its role in the mortgage crisis of 2008. Who became aware of the role AIG FP played in the disaster?

Essay Topic 3

Discuss ISDAs, Ace Greenburg, Bear Sterns and Ben Hockett. How did Hockett contribute to the evolution of Cornwall Capital Management?

(see the answer keys)

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