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This quiz consists of 5 multiple choice and 5 short answer questions through At the Fed.

Multiple Choice Questions

1. Who threatened to stop clearing the trades at Long-Term if their fund fell below a particular amunt?
(a) Chase.
(b) Fidelity.
(c) Goldman Sachs.
(d) Bear Sterns.

2. In 1996, Long-Term was four times as large as what?
(a) The U.S. Treasury.
(b) The largest hedge fund.
(c) A small European country.
(d) The Mexican Treasury.

3. Who developed the Black-Scholes model?
(a) John Meriwether.
(b) David Black.
(c) Myron Scholes.
(d) Jack Salomon.

4. What award did Merton and Scholes win for economics?
(a) The Wall Street Trust.
(b) The Nobel Prize.
(c) The Academy Award.
(d) None of these.

5. How long did Long-Term expect their investors to commit?
(a) 6 months.
(b) 3 months.
(c) 3 years.
(d) 1 year.

Short Answer Questions

1. When markets get jumpy, what begins to rise?

2. In 1998, what market did Long-Term bet would decline?

3. In August 1998, how far down was Long-Term for the year-to-date?

4. In 1998, what act led Long-Term to a fall?

5. In 1996, how much did Long-Term have in assets?

(see the answer key)

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