1. Identify and explain the weakness in Lehman's governance practices.
a. What was the quality of the reporting to the Board by management;
b. What was Lehman's treatment of internal limits and risk management mechanisms in an attempt to boost profitability?
2. What do you meant by leverage? Was Lehman leverage ratio consistent with that considered safe by regulators? What prevented Lehman from being able to safely and quickly deleverage?
3. List and explain the financial events led to the erosion of Lehman's capital base?
4. Explain stress testing. What weaknesses and unusual practices were identified as it relates to Lehman's stress testing.