The Five Dumbest Things on Wall Street: Quiz Answers

As summer drew to a close this weekend, TheStreet.com readers sharpened their trusty No. 2 pencils and attacked the Five Dumbest Things Labor Day quiz.

Three readers correctly answered all 10 questions on Wall Street's dumb and dumber goings-on. David Davis, Gregory Gatchel and James Smith each will get an autographed copy of Jim Cramer's RealMoney: Sane Investing in an Insane World. Thanks to all for playing, and to Jim for the books!

Below are the questions and the answers, along with each item's Dumb-O-Meter score, calculated using a secret algorithm in the Five Dumbest Things Lab's Optical Six Sigma-compliant facilities.

1. A Texas jury held Merck (MRK) liable last month in the death of a man who took its Vioxx painkiller. How did plaintiff lawyer Mark Lanier prod the jury along toward a $253 million judgment?

1. He likened Merck to a cash machine for executives.
   
2. He compared atherosclerosis to a tarp holding garbage onto a pickup truck.
   
3. He suggested that Oprah Winfrey would take note of a finding against Merck.
   
4. All of the above.

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Dumb-o-Meter score: 88. "This is a court of law, and it's not Saturday morning television, and it's not entertainment," a Merck lawyer replied. Well, she was right on the first count, anyway.

2. A Delaware judge ruled in August that Disney's (DIS) board wasn't negligent in its 1996 decision to award former President Michael Ovitz $140 million in severance pay. What didn't Judge William Chandler say about longtime CEO Michael Eisner and the board?

1. Their conduct "fell significantly short of the best practices of ideal corporate governance."
   
2. Directors were "friends and other acquaintances who, though not necessarily beholden to [Eisner], were certainly more willing to accede to his wishes."
   
3. Eisner "enthroned himself as the omnipotent and infallible monarch of his personal Magic Kingdom."
   
4. The board "remains committed to monitoring evolving best practices and adopting new provisions, as appropriate, to serve the long-term interests of the company's shareholders."

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Disney Chairman George Mitchell made the "committed" comment in a subsequent press release announcing the company's latest governance reforms.

Dumb-o-Meter score: 85. In response to the Delaware ruling, Ovitz issued a statement saying he was "looking forward to putting this behind me and moving ahead with my life." Aren't we all.

3. Match the Citigroup (C) executive with the appropriate recent comment.

1. Operating Chief Robert Willumstad.
   
2. Global Consumer Group CEO Marjorie Magner.
   
3. Chairman Sandy Weill.
   
4. CEO Charles Prince.

1. "I have reached a turning point in my life and my career."
   
2. "I am proud of the caliber of our next generation of leaders and their dedication to our future."
   
3. "I have had a great run at Citigroup over nearly two decades."
   
4. "I would never do anything that would hurt the company."

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Dumb-o-Meter score: 82. Prince may like change, but what he really seems to dig is red tape. "A new approximately 30-person Operating Committee will be formed, which will consider strategic issues, foster greater knowledge sharing among the businesses and accelerate organizational decision making and implementation of initiatives," a recent press release trumpeted.

4. Cisco (CSCO) surprised Wall Street last month by saying it now wants to emphasize financial measures other than per-share earnings. What number is the San Jose, Calif., networking giant pointing analysts toward now?

1. Sequential revenue growth.
   
2. Customer order trends.
   
3. The number of shares CEO John Chambers sells each quarter.
   
4. The amount of money Cisco spends buying back stock.

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The company said Aug. 9 that it will provide order growth rates along with sales growth so analysts can try to judge business momentum. Cisco has been talking up its buyback efforts, but then that's nothing new -- Cisco has been very publicly buying back shares since 2001.

Dumb-o-Meter score: 80. Given the rolling buyback and Chambers' preplanned selling efforts, you can see where some people might miss out on the business momentum story.