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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. The SEC was established by the United States Congress in what year?

2. A percentage of FrontPoint was owned by what major investment firm?

3. Howie Hubler was a bond trader for what company in Chapter 9?

4. What is the title of Chapter 7?

5. Cornwall Capital Management began quickly selling their CDOs in Chapter 9 because they were suddenly concerned with whose ability to pay?

Short Essay Questions

1. Why did Mike Burry's reports to investors appear bleak in Chapter 8?

2. For how much did Morgan Stanley settle on the CDOs in Chapter 9?

3. What is a CDS?

4. How much did Mike Burry make from his CDSs in Chapter 9? What was his outcome?

5. What led Cornwall Capital Management to sell off their CDOs in Chapter 9? How much did they make?

6. What impact did the conference have on Cornwall Capital Management in Chapter 7?

7. Who courted Charlie Ledley at the conference in Chapter 6? What was Ledley's objective at the conference?

8. What did Charlie Ledley and Michael Burry do in the aftermath of the market disaster in Chapter 10?

9. What fraudulent actions did Mike Burry take in Chapter 8? Why?

10. When did Howie Hubler disappear? How much did Morgan Stanley lose from his actions?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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

Essay Topic 2

Define and discuss CDSs and CDOs. How many different mortgage bonds comprise a CDO and from what tranches are they chosen?

Essay Topic 3

Describe Michael Burry's tactics in establishing Scion Capital. Where did Burry find investors and what did they think of his approach to trading?

(see the answer keys)

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