Everything you need to understand or teach When Genius Failed by Roger Lowenstein.
When Genius Failed by Roger Lowenstein is the story of the Long Term Capital Management hedge fund from its creation to its fall. The fund was created by John Meriwether after he departed from Salomon Brothers and it resulted in tremendous wealth for Meriwether, the partners, and other investors while it lasted. When they fell, they fell hard and fast at the end.
The book gives a look into the world of international investment banking and bond and equities trading. Meriwether and his cronies developed the concept of arbitrage, or hedge trading. This was trading based on the fact that in well behaved markets, the spreads between cash and futures converge as the contracts come to expiration. As long as the markets behaved in this way, the traders made hundreds of millions of dollars. Arbitrage trading was considered to be very low risk.
Meriwether developed the Arbitrage department...
When Genius Failed Lesson Plans contain 107 pages of teaching material, including: