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. When Meriwether increased his position in Treasury futures, what did he expect the market to do?
(a) Drop substantially.
(b) Collapse.
(c) Perform typically.
(d) Rise sharply overnight.

2. What models did Long-Term follow?
(a) Merton.
(b) All of these.
(c) Black-Scholes.
(d) Value-at-Risk.

3. What affected bond trading in the 1970's?
(a) The Vietnam War.
(b) The democratic elections.
(c) The price of commodities.
(d) The international monetary crisis.

4. In 1993, what was happening more than usual in America?
(a) Refinancing.
(b) Starvation.
(c) Day trading.
(d) Bankruptcy.

5. What financial crisis did Long-Term make it through that most of the market didn't?
(a) The Germany crisis.
(b) The Mexican crisis.
(c) The Switzerland crisis.
(d) The U.S. crisis.

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

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

8. What company was Kapor the founder of?
(a) Lotus Development Corporation.
(b) Finance Development International.
(c) Lochfield Growing Corporation.
(d) Circuit Finance, Inc.

9. Who charged Long-Term much lower fees than other clients?
(a) The hospitality industry.
(b) NYSE.
(c) Brokerage firms.
(d) The Federal Reserve.

10. In 1994, why did the yield raise on the thirty year Treasury bond?
(a) It rose 5%.
(b) It dropped 16%.
(c) It rose 16%.
(d) It dropped 10%.

11. What did Black and Scholes use to calculate market change?
(a) History.
(b) Meriwether's advice.
(c) Calculus and computer models.
(d) In depth financial patterns.

12. Where did Meriwether work in 1979?
(a) Salomon Brothers.
(b) Long-Term.
(c) Lehman.
(d) Merrill Lynch.

13. What is the CFTC short for?
(a) Counting Futures Trading Commodities.
(b) Capitalism Fortune Trust Commonwealth.
(c) Commodities Futures Trading Commission.
(d) Commodities Finding True Commission.

14. What year did Meriwether hire Myron Scholes?
(a) 1993.
(b) 1994.
(c) 1996.
(d) 1995.

15. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?
(a) Endowment Fund.
(b) Quantum Fund.
(c) Treasury Fund.
(d) Millenium Fund.

Short Answer Questions

1. What did Long-Term expect foreign banks to invest?

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

3. What did the letter Meriwether sent to his clients claim it was difficult to do with Long-Term?

4. How much money did Meriwether need to start Long-Term?

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

(see the answer keys)

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