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. Meriwether believed that risk and volatility were what?
(a) Unmanagable.
(b) A part of life.
(c) Abstract ideas.
(d) Quantifiable.

2. What unusual event happened when Meriwether began working with Treasury futures?
(a) The price rose.
(b) The U.S. government collapsed.
(c) The price fell.
(d) He lost millions.

3. Michael Steindardt believed what was the "culprit in 1994"?
(a) Foolish investments.
(b) Poverty.
(c) Wealth.
(d) Leverage.

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

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

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

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

8. What was practically impossible to determine about Long-Term?
(a) Who was in charge.
(b) Why it was doing so well.
(c) Where it was located.
(d) Actual fund assets.

9. Where was David W. Mullins working when Meriwether hired him?
(a) Yale School of Finance.
(b) Salomon Brothers.
(c) The United Nations.
(d) Federal Reserve.

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

11. Why did Long-Term trade in Italy?
(a) It was a safe market.
(b) The opportunity for big returns.
(c) Meriwether was Italian.
(d) The tax write-off opportunity.

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

13. What type of government paper was bought in Italy?
(a) Deeds to monuments.
(b) Italian money.
(c) Fluctuating rate.
(d) Floating rate.

14. Why did Rosenfeld choose not to co-found Kapor's project?
(a) He was too interested in travel.
(b) He was too interested in finance.
(c) He did not like Kapor.
(d) He was competitive with Kapor.

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

Short Answer Questions

1. In 1996, the first bank Long-Term approached regarding credit deemed Long-Term as what?

2. How many employees were with Long-Term in 1996?

3. In 1996, what was Long-Term seeking from the bank that would handle their credit?

4. What was the end result of Meriwether's Treasury bill deal?

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

(see the answer keys)

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