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1. How did Steve Eisman come to work for Oppenheimer Co.? How is he described?

Steve Eisman was a corporate lawyer who realized he hated being a lawyer. Steve's parents worked for Oppenheimer and arranged to give Steve a job as an analyst. Steve, an outrageous man who has trouble filtering his thoughts and attitudes, quickly became loud and outspoken among the many other analysts at Oppenheimer.

2. Discuss Steve Eisman's work with mortgage bonds. How were mortgage bonds divided?

Steve's main concern was mortgage bonds. With mortgages, the borrower had the right to pay off the loan or there was the possibility of default, making the bond unpredictable. Other types of bonds are predictable and are known to be paid off within a specific time. To fix this problem with mortgage bonds, the bonds would be divided into pieces known as tranches.

3. How are tranches differentiated in mortgage bonds?

The first tranche consisted of mortgages that were paid first. The second tranche would be the second group of payoffs that would have a slighter smaller interest rate, all the way to the final tranche that would have the lowest rate of interest, but the highest assurance that the investment would not end early by early payoff.

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