When Genius Failed Test | Mid-Book Test - Easy

Roger Lowenstein
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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. In 1996, what was the second bank Long-Term approached about financing their credit?
(a) International Banking System.
(b) The Italian Republic of Banks.
(c) Union Bank of Switzerland.
(d) National Bank of Russia.

2. What notable invention changed the face of trading in the 1970's?
(a) The scientific calculator.
(b) The computer.
(c) The cell phone.
(d) The video camera.

3. How much money did Meriwether need to start Long-Term?
(a) $50 million.
(b) $100,000.
(c) $1 billion.
(d) $2.5 billion.

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

5. Meriwether was threatened with what, if his Treasury bill deal did not pan out?
(a) A lawsuit.
(b) A promotion.
(c) Death.
(d) Termination.

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

7. Where was the Long-Term Capital Portfolio stored?
(a) Germany.
(b) Cayman Islands.
(c) Bermuda.
(d) Switzerland.

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

9. How much of the face value of a bond do buyers typically pay?
(a) 25%.
(b) 15%.
(c) 10%.
(d) 1%.

10. What did Meriwether do with his staff?
(a) Play golf.
(b) Travel.
(c) All of these.
(d) Dine.

11. In 1996, Long-Term was two and a half times larger than what company?
(a) Lehman Brothers.
(b) Bank of America.
(c) Fidelity Magellan.
(d) Chase.

12. Once in business, what did Long-Term have an easy time getting from banks?
(a) Workers.
(b) Personal information.
(c) Endorsements.
(d) Money.

13. What group did Meriwether found in 1977?
(a) Smith & Meriwether Co.
(b) The Arbitrage Group.
(c) The Meegen Group.
(d) The Commanders.

14. How much did the accounts for investors increase in 1994?
(a) 5%.
(b) 50%.
(c) 10%.
(d) 20%.

15. What did a dealer from J.F. Eckstein & Co. want from Meriwether in 1979?
(a) Help.
(b) Real estate tips.
(c) Empathy.
(d) A better financial model.

Short Answer Questions

1. What type of government paper was bought in Italy?

2. What did Rosenfeld and his friend develop?

3. What was the typical scenario for bond investors in 1994?

4. What did Long-Term do with off-the-run bonds?

5. What were the models Long-Term used unable to predict?

(see the answer keys)

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