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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. Who did John Thain replace in his position as CEO in 2007, as described by the author in Chapter 7?
(a) Stan O’Neal
(b) David Viniar
(c) Jim Cramer
(d) Bob Willumstad

2. In the mid-1980s, Bob Willumstad was rising through the executive ranks of what financial corporation?
(a) Barclays
(b) Chemical Bank
(c) Northern Trust
(d) Westwood Capital LLC

3. What were the quarterly losses that were announced at Lehman Brothers on June 9, 2008?
(a) $1.7 billion
(b) $3.6 billion
(c) $2.8 billion
(d) $2.2 billion

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

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

Short Answer Questions

1. On what date does the author describe Dick Fuld holding a copy of the Wall Street Journal with an article on page C1 that was deemed by him “the worst betrayal of my career” in Chapter 6?

2. Where was the hedge fund Peloton based?

3. Jamie Dimon told Hank Paulson that JP Morgan had upped its offer from $2 per share to what in Chapter 2?

4. 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?

5. According to the author in Chapter 5, Jim Cramer, a media star, was solidly Harvard and counted as one of his best friends which individual called “the bane of Wall Street”?

Short Essay Questions

1. What was the secret plan that Hank Paulson developed for how to deal with the situation if Lehman Brothers or several banks should begin to fail in Chapter 4?

2. How does the author describe Jamie Dimon’s position in the Bear Stearns deal in Chapter 3?

3. What was Hank Paulson’s first concern regarding the possibility of failure of Lehman Brothers, according to the author in Chapter 4?

4. What executive meeting does the author describe in the opening of Chapter 9? Where did the meeting take place?

5. How does the author describe Bob Steel in Chapter 3? Why was Bob Steel in a tough position?

6. How was Hank Paulson’s rise to the post of Treasury Secretary described in Chapter 2?

7. To whom did John Thain turn for help with Merrill Lynch’s situation in Chapter 7? What response did he receive?

8. Who was let go from Lehman Brothers during an executive committee meeting in Chapter 6?

9. What was the impact of David Einhorn’s speech regarding Lehman Brothers’ assets in Chapter 5?

10. How does the author describe John Thain’s rise in the financial world in Chapter 7?

(see the answer keys)

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