How to Crack the Credit Crunch Code

The unprecedented "credit crunch" ignited by the excesses of the recent housing boom has impacted us all. In addition to the jolts to home prices and securities valuations , we have been bombarded by the business media with new acronyms and abbreviations.

So here is an investment quiz to test your understanding of all this crunch-inspired "code" or "alphabet soup." For any of the terms you are not completely familiar with, explanations will follow the questions to help you get a better grasp on the terminology of the credit crisis.

Feel free to use the many features available on TheStreet.com to help you answer the questions. A great place to start your search for investment knowledge is the "Search" box at the top of TheStreet.com.

Another great resource available on our Web site is a glossary of definitions and explanations of financial and investment terms. Just roll-over the "Portfolio & Tools" tab at the top of the site and select the "Glossary" option.

This investment quiz is a self-test, so you keep your own score. Ready?

Good luck!

Question 1: What is LIBOR?

LIBOR is a term you will see with some regularity in the financial news. Besides having an impact at the highest level of the credit markets, the term appears hidden in documentation that crosses the hands of many financially unsophisticated individuals. Many -- to their subsequent regret -- never bothered to learn more about LIBOR before signing documents with the term sprinkled in inconspicuous places.

Question 2: What are ARMs?

Hint: They are appendages that many would like to remove -- and not ones on the human body.

This term frequently relates to the LIBOR question. The acronym A.R.M. might be appropriate in that this financial instrument has a reach. Specifically, its influence in the credit crunch extends from the basic level of the working stiff to creations of the most supposedly sophisticated financial engineers.

Question 3: What does CMO stand for?

In many cases, this term also relates to the two questions above. It might be described as the adhesive that held the whole credit imbroglio together -- until things became unglued, unleashing the credit crunch!

Question 4: In investment terms, how would you define SWF?

Hint: It does not stand for "single white female."

Finally, we are getting to something that might help us turn the corner and eventually get the world out of this credit mess. SWFs have come to the rescue of firms enmeshed in the credit crunch, such as Citigroup C and Morgan Stanley MS, as well as some notable non-financial companies, such as DellDELL and Rio TintoRTP.

Question 5: What is the TSLC?

Hint: It is not the Taiyuan Satellite Launch Center in China.

This has been one of the big guns in the battle to extricate our financial system from the credit crunch.

Now, answers to questions one through five.