|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. What put pressure on the currency in Brazil?
(a) The United State balanced the budget.
(b) Goldman's bought out China's debt.
(c) Moody's downgraded Brazilian debt.
(d) Warren Buffet paid off Brazilian debt.
2. When did Long-Term begin scrambling to raise money?
(a) August 24.
(b) August 10.
(c) August 30.
(d) August 2.
3. After the Russian financial crisis, what caused further fluctuations in the market?
(a) Panicked investors.
(b) Interest from the IRS.
(c) Interest from big oil.
(d) Small time investors.
4. Who was withdrawing from the hedge fund markets?
(a) Small investment firms.
(c) Foreign countries.
(d) Large investment firms.
5. What notable player was on vacation during the crisis in Russia?
(a) The president of the United States.
(b) Alan Greenspan.
(c) The president of Russia.
(d) Warren Buffet.
6. In a letter to clients, to what did Long-Term attribute the decrease in profits?
(a) Foolish investments.
(b) Poor margins.
(c) Widening spreads.
(d) Irresponsibility in foreign nations.
7. What was the climate at Long-Term during the Russian financial crisis?
8. By the end of August 1998, what market had practically stopped trading altogether?
(a) Gold markets.
(b) International markets.
(c) Stock markets.
(d) Bond markets.
9. What resource close to Long-Term began to experience financial difficulties following the financial problems in Russia?
(a) Long-Term's management company.
(c) Latin America.
(d) Long-Term's audit company.
10. Once the financial market in Russia collapsed, what did people stop trading?
11. Who threatened to stop clearing the trades at Long-Term if their fund fell below a particular amunt?
(c) Bear Sterns.
(d) Goldman Sachs.
12. Who did Long-Term threaten to sue, following a threat not to clear trades?
(a) Bear Sterns.
(b) ING trading.
(c) Waterhouse Cooper.
13. In 1998, Long-Term expected prices to do what?
(d) Stay the same.
14. What factor was forcing those with hedge funds to sell?
(a) Ample credit.
(b) Lack of credit.
(c) Toxic assets.
(d) The Fed's involvement.
15. What did Long-Term risk losing if they allowed their assets to fall below five hundred million dollars?
(a) The right to trade.
(b) Their relationships with bankers.
(c) Their workers.
(d) Their office.
Short Answer Questions
1. Who was the Fed Chairman in 1997?
2. What did the incident on August 21 cost Long-Term?
3. In 1998, who published Meriwether's letter to his clients?
4. How many banks stepped forward to help bail out Long-Term?
5. What did Long-Term avoid by working with derivatives instead of stocks?
This section contains 384 words
(approx. 2 pages at 300 words per page)