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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. Where does the author say Gerald Domini lived in Chapter 5?

2. In what year does the author state Long-Term Capital Management blew up in Chapter 5?

3. Bob Willumstad was a third-generation son of immigrants from where?

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. Who was the founder of the company that would become AIG?

Short Essay Questions

1. Who did Bob Steel contact to discuss the Lehman Brothers problem in Chapter 4? What response did he get?

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

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

4. 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?

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

6. How is Dick Fuld’s career described in Chapter 1? Who did Fuld choose as his right-hand-man at Lehman Brothers?

7. How does the author describe AIG’s establishment and history in Chapter 8?

8. Who did Bob Willumstad replace as CEO of AIG? How does the author describe Hank Greenberg’s thoughts on this transition in Chapter 8?

9. How was Lehman Brothers impacted by the news of Bear Stearns’ collapse, according to the author in Chapter 1? What actions did the company take?

10. For what reason was Hank Paulson angry when he heard about the JP Morgan and Bear Stearns deal in Chapter 2?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Discuss Henry Paulson’s plan for the Treasury Department to purchase up to $500 billion of the bad assets off the banks in order to stabilize the markets. What flaws can be seen in this plan? In what ways would it benefit Wall Street? In what ways would it benefit the American public?

Essay Topic 2

Describe and analyze the testimonies of Timothy Geithner, Bob Steel, Jamie Dimon, and Ben Bernanke before the Senate Banking Committee in 2008. How did the media interpret these testimonies during this time? What was the public response?

Essay Topic 3

Discuss the career of David Einhorn and his establishment of Greenlight Capital. When was Greenlight Capital established and how quickly did the company grow? What role did the hedge fund play in the derivatives market and in the downfall of 2008?

(see the answer keys)

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