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WorksheetsThe Big Short chapter 3 review
Total questions: 20
Worksheet time: 10mins
1. What Chinese national who came in second in a math competition in China accompanied Greg Lippmann in Chapter 3?
Euguene Xu.
Steve Eisman.
Meredith Whitney.
Michael Oher.
In Chapter 3, soon all the CDSs AIG FP sold consisted primarily of what?
Subprime mortgages.
Auto loans.
Pork futures.
Gold and silver.
Who began taking the bottom tranches of their mortgage bonds and packaging them together to create CDOs in Chapter 3?
Standard & Poors.
Scion Capital.
Cornwall Capital Management.
Goldman Sachs.
What does CDO stand for?
Common debt obligations.
Client debt options.
Calculated debt options.
Collateralized debt obligations.
Who thought that if AIG stopped buying the bonds, the subprime mortgage bond market would collapse, making him a fortune in Chapter 3?
Greg Lippman.
Meredith Whitney.
Michael Lewis.
Euguene Xu.
What is the name of Mike Burry's investment group?
Cornwall Capital Management.
Moody's.
Oppenheimer and Co.
Scion Capital.
How often did holders of CDSs have to pay the insurance premiums?
Every month
Every 6 months
Every decade
Every second year
Where is the headquarters of AIG?
Dusseldorf, Germany
New York City, USA
London, England
Paris, France
Who is Gorgan Gekko?
The accountant who helped Greg Lippmann figure out how to short mortgage Bonds
A famous Wall Street untrustable investor who bet against the subprime mortgage bonds.
Famous character from the movie Wall Street. He was completely untrustable.
The man who made the first CDO and sold these to Goldman Sachs
What does a violation of code mean?
This means to write a new computer code and allow the CDSs to be traded
This refers to a secret message that has now been revealed
This refers to a set of rules that have been broken.
This refers to an attempt to steal financial information from a competing bank
What does rubber-stamped mean?
Someone died due to a lack of exercise.
Something that is rubber and is bought and sold on the stock market.
something is approved with detailed and careful analysis.
something is approved with little to no analysis.
Who was taking on most of the risk of the subprime collapse?
Goldman Sacks
AIG
Greg Lippmann
Steve Eisman
What did Eugene Xu find out that convinced made Greg Lippman very happy about buying CDSs?
They didn’t need to collapse; they merely needed to stop rising so fast for the CDSs to make money
House prices had to all collapse; they merely needed to lose 90% of their value for the CDSs to make money.
House prices had to keep going up fast for the CDSs to make money.
House prices have to double in price in the next six months for the CDSs to make money.
Why did Greg Lippmann fly to London to have a meeting with an AIG representative?
To merge with Goldman sacks and start shorting Home Equity Mezzanine Tranches.
To ask them to invest in his hedge fund that had a billion dollars worth of CDSs.
To try and convince them to start buying CDSs.
To try and convince them to stop ensuring CDOs against defaults.
Complete this sentence from chapter 3: “The ______________ the market and the more complicated the securities, the more money the trading desks at big Wall Street firms can make from the argument."
lower value
higher value
more transparent
less transparent
What kind of trader was Greg Lippmann?
Crypto trader
Equities trader
Bond trader
Forex trader
When Gregg Lippman met Steve Eisman, what happened?
Steve Eisman told Greg Lippman that he is a narcissist.
Steve Eisman yelled at Greg Lippman.
Steve Eisman ignored Greg Lippman.
Steve Eisman Liked Greg Lippman.
Complete this sentence from chapter 3: Millions of Americans had no ability to repay their mortgages unless their houses _______________ in value.
fell dramatically
fell slightly
stayed the same
rose dramatically
What did Steven Eisman find strange about Greg Lippman selling CDSs?
Greg Lippman was a really rude and mean person. So, Steve wanted to short the CDSs.
Greg Lippman was a really nice and kind person. So, Steve didn’t want to short the CDSs.
These CDSs were shorting the bonds that Lippmann’s firm was creating.
These CDSs were shorting Goldman Sachs CDOs which Lippman had created
In the CDSs trade Goldman, what was Goldman Sachs doing?
They were the company providing insurance for the CDOs.
They were playing the middle man in the CDS trade and thereby assuming no risk.
They were holding all the CDOs and thereby assuming all the risk.
They were buying all the CDSs from Lippman and Eisman to make maximum profit.
