For Prof. MGK Only
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week5insidejob_1.docxECO 315 Introductions to Money and Banking
Week5 Homework: Inside Job (DVD) (10 points)
After watching the movie “Inside Job” directed by Charles Ferguson in 2010, answer the following questions. All answers need to be typed and uploaded to D2L dropbox.
1) List the main sources of the financial crisis in 2008, and describe them how they affect the financial market.
2) Carefully define following terminologies
A. CDO (Collateralized Debt Obligation)
B. Subprime Loan
C. Predatory Loan
D. Credit Default Swap
E. Foreclosure
3) The movie insists the conflicts of interest for economists. Give an example from the movie, and explain the reason why it causes the conflict of interest.
4) Find an example of the principal and agent problem (Moral Hazard) and explain how that affects the failure of investment banks in 2008 financial crisis.
