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This quiz consists of 5 multiple choice and 5 short answer questions through Chapters 4-5.

Multiple Choice Questions

1. Hank Paulson and his staff prepared a secret plan for how to deal with the situation in Chapter 4. Their plan proposed that should the banks fail, the Treasury Department would purchase up to how many of the bad assets of the banks in order to stabilize the market?
(a) $500 billion
(b) $100 billion
(c) $300 billion
(d) $200 billion

2. When did FAS 157 become effective?
(a) June 28, 2005
(b) November 15, 2007
(c) August 1, 2004
(d) May 9, 2006

3. On what date did Lehman Brothers release its earnings report for the first quarter of 2008?
(a) February 6, 2008
(b) June 22, 2008
(c) April 1, 2009
(d) March 18, 2008

4. Hank Paulson joined Goldman Sachs covering large industrial companies in the Midwest in what year?
(a) 1974
(b) 1971
(c) 1967
(d) 1980

5. The assignment of Jamie Dimon and a dozen of his rival CEOs at the emergency meeting at the Federal Reserve Bank of New York was to come up with a plan to save what company, according to the author in the Prologue?
(a) Merrill Lynch
(b) Berkshire Hathaway
(c) Lehman Brothers
(d) JP Morgan

Short Answer Questions

1. What title did Hank Paulson hold in 2008?

2. What was the name of Lehman Brothers’ bomb-sniffing Labrador described in Chapter 5?

3. What was the largest and most prestigious investment bank in the nation that Jamie Dimon advised his staff could possibly file bankruptcy in the Prologue?

4. What word from Chapter 5 derives from German and describes an all-motorized force concentration of tanks, infantry, artillery, combat engineers and air power?

5. What word in finance refers to the act of making loans to people who may have difficulty maintaining the repayment schedule?

(see the answer key)

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