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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What word in finance refers to the act of making loans to people who may have difficulty maintaining the repayment schedule?
(a) Subprime lending
(b) Derivative lending
(c) Naked short-selling
(d) Short-selling

2. In 2008, AIG had grown into one of the world’s largest financial companies, with more than how much worth of assets on its books?
(a) $300 billion
(b) $1 trillion
(c) $450 billion
(d) $800 billion

3. On the heels of David Einhorn’s campaign against Lehman Brothers, Lehman’s stock had fallen how much since Einhorn’s speech in May, according to the author in Chapter 6?
(a) 22.6%
(b) 12.5%
(c) 31.0%
(d) 37.2%

4. What reporter wrote the story about Lehman that he described in Chapter 6 as “the worst betrayal of my career”?
(a) Colm Kelleher
(b) Susanne Craig
(c) Gerald Donini
(d) David Einhorn

5. John Thain went to Michael Bloomberg and proposed that Bloomberg buy back what percent of his company from the bank in Chapter 7?
(a) 35%
(b) 20%
(c) 10%
(d) 50%

6. What was the name of Lehman Brothers’ bomb-sniffing Labrador described in Chapter 5?
(a) Tenaya
(b) Sassy
(c) Bella
(d) Ducky

7. Warren Buffett is the primary shareholder, chairman and CEO of what American multinational conglomerate holding company?
(a) BlackRock
(b) Westwood Capital LLC
(c) Wells Fargo
(d) Berkshire Hathaway

8. What title did Hank Paulson hold in 2008?
(a) United States Secretary of the Treasury
(b) United States Secretary of the Interior
(c) United States Secretary of State
(d) United States Secretary of Education

9. How old was Scott Friedheim described by the author in Chapter 6?
(a) 36
(b) 53
(c) 42
(d) 29

10. In what year does the author state Long-Term Capital Management blew up in Chapter 5?
(a) 1995
(b) 1999
(c) 1998
(d) 1996

11. John Thain was described as the CEO of which investment banking and wealth management firm in Chapter 7?
(a) Merrill Lynch
(b) Greenlight Capital
(c) Berkshire Hathaway
(d) Lehman Brothers

12. Timothy Geithner worked for the Treasury Department and what organization prior to his appointment as President of the Federal Reserve Bank of New York?
(a) The World Bank
(b) The Bank of Berlin
(c) The International Monetary Fund
(d) The Bank of Rome

13. Where was Hank Paulson born?
(a) Knoxville, TN
(b) Palm Beach, FL
(c) Des Moines, IA
(d) Billings, MT

14. Jamie Dimon told Hank Paulson that JP Morgan had upped its offer from $2 per share to what in Chapter 2?
(a) $10 per share
(b) $4 per share
(c) $9 per share
(d) $16 per share

15. When was Warren Buffett born?
(a) 1941
(b) 1925
(c) 1930
(d) 1918

Short Answer Questions

1. The hedge fund Peloton had been started by what former Goldman executive, according to the author in Chapter 5?

2. Dick Fuld had been pressing what old friend and former Chairman of AIG to put money into Lehman Brothers in Chapter 6?

3. Where was Dick Fuld visiting when he received an urgent call from Henry Paulson regarding the collapse of the fifth largest investment bank in the U.S., according to the author in Chapter 1?

4. According to the author in Chapter 3, Geithner kept Jamie Dimon from abandoning the negotiations with Bear Stearns by working out a deal where the Federal Reserve lent money to Bear Stearns through JP Morgan, guaranteeing Morgan against how much in losses?

5. Who was the head of communications at Lehman Brothers in Chapter 6?

(see the answer keys)

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