|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. What did Long-Term do when IOs started to fall?
(a) Buy them up.
(b) Lie to investors.
(c) Sell their shares.
(d) Explain the situation to investors.
2. What did Meriwether warn his investors against in 1994?
(a) Further growth.
(b) A repeat performance.
(c) Not investing enough with Long-Term.
(d) His early retirement.
3. What did Meriwether do with his staff?
(b) Play golf.
(c) All of these.
4. What group did Meriwether found in 1977?
(a) The Commanders.
(b) The Arbitrage Group.
(c) Smith & Meriwether Co.
(d) The Meegen Group.
5. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?
(a) Quantum Fund.
(b) Endowment Fund.
(c) Treasury Fund.
(d) Millenium Fund.
6. Who did most funds have to be registered with?
(a) The Fed.
(c) Most funds did not have to be registered.
7. In 1994, why did the price of bonds drop?
(a) Property value went down.
(b) The Fed raised interest rates.
(c) There was too much wealth in America.
(d) The Fed lowered interest rates.
8. What did a dealer from J.F. Eckstein & Co. want from Meriwether in 1979?
(a) Real estate tips.
(d) A better financial model.
9. What is the method of paying a percentage of a bond called?
(a) A bond fee.
(b) A trim.
(c) A percentage price.
(d) A haircut.
10. In 1996, what was the second bank Long-Term approached about financing their credit?
(a) National Bank of Russia.
(b) Union Bank of Switzerland.
(c) International Banking System.
(d) The Italian Republic of Banks.
11. How much did the accounts for investors increase in 1994?
12. What level of risk did Long-Term offer?
13. What is the CFTC short for?
(a) Counting Futures Trading Commodities.
(b) Commodities Futures Trading Commission.
(c) Commodities Finding True Commission.
(d) Capitalism Fortune Trust Commonwealth.
14. What did the letter Meriwether sent to his clients claim it was difficult to do with Long-Term?
(a) Take legal action.
(b) Get a job.
(c) Make money.
(d) Lose money.
15. What did banks and investors want from Long-Term?
(a) Client referrals.
(c) It to shut down.
(d) To be involved.
Short Answer Questions
1. What did Long-Term expect foreign banks to invest?
2. In 1996, Long-Term was four times as large as what?
3. What were the models Long-Term used unable to predict?
4. In 1996, who did Long-Term first approach to handle their credit?
5. How much did Long-Term plan to take from its profits?
This section contains 393 words
(approx. 2 pages at 300 words per page)