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, the first bank Long-Term approached regarding credit deemed Long-Term as what?
(a) Too risky.
(b) Brilliant.
(c) A great investment.
(d) Greedy.

2. How was Meriwether's career affected following the Treasury bill deal?
(a) He became a regulation advocate.
(b) He became a public speaker.
(c) He lost his job.
(d) He was made partner.

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

4. How much did banks and investors make in conjunction with Long-Term?
(a) 1-200 million.
(b) 50 million.
(c) Several hundred thousand.
(d) 1 million.

5. How much money did Rosenfeld's business bring in?
(a) Hundreds of thousands.
(b) A couple thousand.
(c) Two million.
(d) Five million.

6. What did the letter Meriwether sent to his clients claim it was difficult to do with Long-Term?
(a) Take legal action.
(b) Lose money.
(c) Make money.
(d) Get a job.

7. In 1996, Long-Term was four times as large as what?
(a) The largest hedge fund.
(b) The U.S. Treasury.
(c) A small European country.
(d) The Mexican Treasury.

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

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

10. Who developed the Black-Scholes model?
(a) Myron Scholes.
(b) John Meriwether.
(c) Jack Salomon.
(d) David Black.

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

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

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

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

15. In bond trading, what are loans backed by collateral called?
(a) Mini trades.
(b) Exclusive trades.
(c) Repo financing.
(d) Fair financing.

Short Answer Questions

1. In 1994, why did the price of bonds drop?

2. Meriwether was threatened with what, if his Treasury bill deal did not pan out?

3. What is the CFTC short for?

4. In 1996, what was the second bank Long-Term approached about financing their credit?

5. In the 1970's, what type of trading was considered dull?

(see the answer keys)

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