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

Multiple Choice Questions

1. When did Long-Term start losing money?
(a) When Meriwether opened a new company.
(b) When arbitrage operations were suspended.
(c) When the Asian market collapsed.
(d) When Warren Buffet spoke out against Long-Term.

2. What type of funds gained popularity in the 1990's?
(a) Treasury.
(b) Value.
(c) Mutual.
(d) Real estate.

3. What did Long-Term risk losing if they allowed their assets to fall below five hundred million dollars?
(a) The right to trade.
(b) Their workers.
(c) Their relationships with bankers.
(d) Their office.

4. Michael Steindardt believed what was the "culprit in 1994"?
(a) Leverage.
(b) Poverty.
(c) Wealth.
(d) Foolish investments.

5. In 1996, why was it difficult to continue to find strong profits in arbitrage trades?
(a) The market was over-saturated.
(b) Long-Term did not have investment capital.
(c) It was illegal to perform these trades.
(d) The market did not have enough players.

Short Answer Questions

1. What notable invention changed the face of trading in the 1970's?

2. During the turmoil of 1998, investors avoided Long-Term because they were trying to avoid what?

3. After the first bad year experienced by Long-Term, what did its overall record look like?

4. Where did Meriwether work in 1979?

5. What is the method of paying a percentage of a bond called?

(see the answer key)

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