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

Multiple Choice Questions

1. What did Scholes and Merton think of some of the private trades Long-Term made in 1998?
(a) They were excited.
(b) They did not support them.
(c) They supported them.
(d) They were impressed.

2. In 1996, who did Long-Term first approach to handle their credit?
(a) Washington Mutual.
(b) Bank of America.
(c) Chase.
(d) Citibank.

3. Where was the London office for Long-Term located?
(a) Winchester.
(b) Picadilly Square.
(c) Mayfair.
(d) Buckingham Palace.

4. What did the banks and investors use to estimate Long-Term's assets?
(a) History of investments.
(b) Net worth of investors.
(c) All of these.
(d) Their exposure.

5. How much did Long-Term plan to take from its profits?
(a) 15%.
(b) 10%.
(c) 25%.
(d) 30%.

Short Answer Questions

1. What did Long-Term avoid by working with derivatives instead of stocks?

2. Where was Robert C. Merton working when Meriwether hired him?

3. What notable player was on vacation during the crisis in Russia?

4. When did Long-Term begin scrambling to raise money?

5. What is the CFTC short for?

(see the answer key)

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