The Big Short: Inside the Doomsday Machine by Michael Lewis - Exam
- 1. The Big Short: Inside the Doomsday Machine by Michael Lewis is a compelling narrative that delves into the intricate and often convoluted world of the 2008 financial crisis, offering readers a gripping account of the events leading up to the collapse of the housing market and the subsequent economic fallout. Lewis masterfully unravels the complex web of financial instruments, including mortgage-backed securities and credit default swaps, while vividly portraying the characters of a few astute investors who correctly predicted the impending disaster and bet against the housing market. Through the eyes of these unconventional protagonists, the book explores themes of greed, corruption, and ignorance that permeated Wall Street and the financial industry at large. With sharp wit and insightful commentary, Lewis captures the chaos and absurdity of the financial machinations that led to one of the greatest economic crises in history, making the intricacies of high finance accessible to the general reader. The Big Short not only serves as a cautionary tale about the dangers of speculative investing and systemic risk but also highlights the broader implications of financial mismanagement and the moral failings of those in power.
Who is the author of the book 'The Big Short: Inside the Doomsday Machine'?
A) Ben Bernanke
B) Sylvia Nasar
C) Michael Lewis
D) Daniel Kahneman
- 2. In what year was 'The Big Short: Inside the Doomsday Machine' first published?
A) 2014
B) 2016
C) 2008
D) 2010
- 3. Which financial product played a key role in the events described in the book?
A) Savings accounts
B) Treasury bonds
C) Credit default swaps
D) Stock options
- 4. Which major investment bank collapsed during the financial crisis?
A) JP Morgan Chase
B) Lehman Brothers
C) Goldman Sachs
D) Morgan Stanley
- 5. Who founded the hedge fund Scion Capital in the book?
A) Michael Burry
B) Steve Eisman
C) Greg Lippmann
D) Mark Baum
- 6. Which government-sponsored enterprise played a significant part in the housing market collapse?
A) Ginnie Mae
B) Sallie Mae
C) Fannie Mae
D) Freddie Mac
- 7. What does 'CDO' stand for in the context of the book?
A) Collateralized Debt Obligation
B) Credit Derivative Organization
C) Collateral Deposit Obligation
D) Credit Default Option
- 8. Which investment bank did Michael Burry initially approach to create credit default swaps bets?
A) Goldman Sachs
B) Morgan Stanley
C) JP Morgan Chase
D) Lehman Brothers
- 9. What asset class was at the center of the collapse described in the book?
A) Commodities
B) Mortgage-backed securities
C) Stocks
D) Government bonds
- 10. Which famous investor is known as 'The Oracle of Omaha' and is referenced in the book?
A) Warren Buffett
B) George Soros
C) Paul Tudor Jones
D) Carl Icahn
- 11. What agency oversees the regulation of the stock market in the United States?
A) SEC (Securities and Exchange Commission)
B) FBI (Federal Bureau of Investigation)
C) IRS (Internal Revenue Service)
D) EPA (Environmental Protection Agency)
- 12. What is the term used to describe the practice of combining various loans into one pool and selling slices of that pool to investors?
A) Securitization
B) Hedging
C) Leveraging
D) Speculating
- 13. Who famously said, 'There ain't no such thing as a free lunch' and is mentioned in the book?
A) Adam Smith
B) John Maynard Keynes
C) Milton Friedman
D) Paul Samuelson
- 14. What term describes the practice of making a profit on the difference between buying and selling prices of the same security?
A) Leveraging
B) Arbitrage
C) Speculation
D) Diversification
- 15. What is the name of the financial instrument that gives the owner the right to sell an asset at a specified price within a specified period?
A) Call option
B) Put option
C) Bond option
D) Stock option
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