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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What happened to Meriwether's Treasury bill deal before it was resolved?
(a) It fell apart.
(b) Big losses.
(c) Huge gains.
(d) It remained steady.

2. What notable invention changed the face of trading in the 1970's?
(a) The cell phone.
(b) The scientific calculator.
(c) The computer.
(d) The video camera.

3. Where was Robert C. Merton working when Meriwether hired him?
(a) Harvard.
(b) NASA.
(c) The Federal Exchange Commission.
(d) Wall Street.

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

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

6. In the 1970's, what type of trading was considered dull?
(a) Gasoline.
(b) Corn.
(c) Bond.
(d) Securities.

7. Who helped Meriwether raise money for Long-Term?
(a) Merrill Lynch.
(b) Warren Buffet.
(c) Salomon Brothers.
(d) No one.

8. Who became the temporary CEO of Meriwether's group when scandal hit?
(a) Warren Buffet.
(b) Paul Mozer.
(c) J.F. Salomon.
(d) John Meriwether.

9. How much did Long-Term earn in its first year of operation?
(a) 28%.
(b) 5%.
(c) 10%.
(d) 75%.

10. In 1996, Long-Term was two and a half times larger than what company?
(a) Lehman Brothers.
(b) Chase.
(c) Bank of America.
(d) Fidelity Magellan.

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

12. Who typically invested in hedge funds?
(a) The Federal Reserve.
(b) Foreign banks.
(c) A club of exclusive investors.
(d) The general population.

13. Who did most funds have to be registered with?
(a) SEC.
(b) The Fed.
(c) Most funds did not have to be registered.
(d) CFTC.

14. In 1996, what was Long-Term seeking from the bank that would handle their credit?
(a) Legitimacy.
(b) Tax shelter.
(c) Asset storage.
(d) Cash flow.

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

Short Answer Questions

1. In 1993, what was happening more than usual in America?

2. What was Meriwether's team allowed to do, following the Treasury bill deal?

3. Where was the Long-Term Capital Portfolio stored?

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

5. What did Long-Term want to do for investors?

(see the answer keys)

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