When Genius Failed Test | Mid-Book Test - Medium

Roger Lowenstein
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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. What was Meriwether's team allowed to do, following the Treasury bill deal?
(a) Spread trades.
(b) Vacation in Italy.
(c) Coach the office.
(d) Set Treasury standards.

2. What is the CFTC short for?
(a) Commodities Futures Trading Commission.
(b) Counting Futures Trading Commodities.
(c) Capitalism Fortune Trust Commonwealth.
(d) Commodities Finding True Commission.

3. In 1996, the first bank Long-Term approached regarding credit deemed Long-Term as what?
(a) Greedy.
(b) A great investment.
(c) Brilliant.
(d) Too risky.

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

5. In 1994, why did the yield raise on the thirty year Treasury bond?
(a) It rose 5%.
(b) It rose 16%.
(c) It dropped 10%.
(d) It dropped 16%.

Short Answer Questions

1. What type of funds gained popularity in the 1990's?

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

3. What did Meriwether warn his investors against in 1994?

4. Who charged Long-Term much lower fees than other clients?

5. What notable company went bankrupt in the 1970's?

Short Essay Questions

1. What was the Fed's response to Long-Term's exposure?

2. What contributes to the estimation of market volatility?

3. When did huge losses begin for Long-Term and why?

4. What strategy led to Long-Term's downfall during the Russian financial crisis?

5. When did Meriwether begin making sales calls for Long-Term?

6. What was Long-Term's objective in seeking out a bank to finance their credit?

7. Why did the issue in Russia cost Long-Term money on an initial basis?

8. What was the goal of the Federal Reserve when it was created?

9. By the time Long-Term had been in business for two years, how did it compare to other old Wall Street companies?

10. What was the financial climate when Merton and Scholes were awarded the Nobel Prize?

(see the answer keys)

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