When Genius Failed Test | Final Test - Easy

Roger Lowenstein
This set of Lesson Plans consists of approximately 99 pages of tests, essay questions, lessons, and other teaching materials.
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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. To create a paired-share, what is common stock partnered with?
(a) Preferred stock.
(b) Bond deals.
(c) Private stock.
(d) Shorted stocks.

2. During the financial crisis in 1998, what did the partners keep from the workers?
(a) Money.
(b) Profits.
(c) Information.
(d) Hope.

3. What was the internal climate at Long-Term in 1998?
(a) Negative.
(b) Positive.
(c) The same as always.
(d) Deteriorating.

4. What determines the swap rate in a country?
(a) The price of oil.
(b) The price of corn.
(c) Interest rates on the real estate market.
(d) Interest rates on government debt.

5. 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 office.
(d) Their workers.

6. When the Fed visited Long-Term, what did Hilibrand show them?
(a) His recent financial model.
(b) The risk aggregator.
(c) The new buildings.
(d) The door.

7. What regulation did Long-Term bypass when trading equities?
(a) Regulation-E.
(b) Regulation-C.
(c) Regulation-B.
(d) Regulation-T.

8. Who suspended arbitrage operations in April 1998?
(a) Goldman Sachs.
(b) Salomon.
(c) Chase.
(d) Fidelity Bank and Trust.

9. After the first bad year experienced by Long-Term, what did its overall record look like?
(a) Mediocre.
(b) Terrible.
(c) Fantastic.
(d) Typical.

10. Who was the Fed Chairman in 1997?
(a) Madeleine Albright.
(b) Alan Greenspan.
(c) Warren Buffet.
(d) Hillary Clinton.

11. What did Scholes and Merton think of some of the private trades Long-Term made in 1998?
(a) They were impressed.
(b) They were excited.
(c) They did not support them.
(d) They supported them.

12. What typically happens to stock prices when a merger is revealed?
(a) They crash.
(b) They go up.
(c) They stay the same.
(d) They go down.

13. When did Long-Term start losing money?
(a) When arbitrage operations were suspended.
(b) When the Asian market collapsed.
(c) When Warren Buffet spoke out against Long-Term.
(d) When Meriwether opened a new company.

14. Who threatened to stop clearing the trades at Long-Term if their fund fell below a particular amunt?
(a) Chase.
(b) Fidelity.
(c) Bear Sterns.
(d) Goldman Sachs.

15. What was the common belief regarding nuclear powers?
(a) They are not stable.
(b) They never default.
(c) They always default.
(d) They do not have capital.

Short Answer Questions

1. What resource close to Long-Term began to experience financial difficulties following the financial problems in Russia?

2. What are some of the new markets Long-Term looked into in 1997?

3. What notable player was on vacation during the crisis in Russia?

4. Who did Long-Term threaten to sue, following a threat not to clear trades?

5. What put pressure on the currency in Brazil?

(see the answer keys)

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