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, Long-Term had achieved thirty times its what?
(a) Original goal.
(b) Debt capacity.
(c) Proposed value.
(d) Starting capital.

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

3. What is the method of paying a percentage of a bond called?
(a) A percentage price.
(b) A haircut.
(c) A trim.
(d) A bond fee.

4. What type of strategy did Long-Term employ?
(a) Whatever was dictated by the market.
(b) High risk.
(c) Moderate risk.
(d) Low risk.

5. During the time period in "Hedge Fund", how many people were millionaires due to the stock market?
(a) 5 million.
(b) 6 million.
(c) 20 million.
(d) 1 million.

6. What notable company went bankrupt in the 1970's?
(a) Penn Weapons Industry.
(b) Penn Central Railroad.
(c) Penn Coal.
(d) Penn North Distillery.

7. What did banks and investors want from Long-Term?
(a) To be involved.
(b) Regulation.
(c) It to shut down.
(d) Client referrals.

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

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

10. What percentage of Americans had no knowledge of Long-Term?
(a) 50%.
(b) 10%.
(c) 99%.
(d) 75%.

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

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

13. What did Rosenfeld and his friend develop?
(a) Energy bars.
(b) Energy drinks.
(c) A financial museum.
(d) Software.

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

15. In 1996, how much did Long-Term have in assets?
(a) $140 billion.
(b) $1 billion.
(c) $500 million.
(d) $120 million.

Short Answer Questions

1. How much did banks and investors make in conjunction with Long-Term?

2. In 1994, why did the yield raise on the thirty year Treasury bond?

3. What did the traders accept about the financial models they used?

4. Where were Italian bonds sold by Long-Term?

5. How much did Long-Term earn in its first year of operation?

(see the answer keys)

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