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

2. How much money did Rosenfeld's business bring in?
(a) Five million.
(b) Hundreds of thousands.
(c) A couple thousand.
(d) Two million.

3. What percentage of Americans had no knowledge of Long-Term?
(a) 99%.
(b) 75%.
(c) 50%.
(d) 10%.

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

5. In 1996, what was the second bank Long-Term approached about financing their credit?
(a) National Bank of Russia.
(b) Union Bank of Switzerland.
(c) The Italian Republic of Banks.
(d) International Banking System.

Short Answer Questions

1. What affected bond trading in the 1970's?

2. What did banks and investors want from Long-Term?

3. What was J.F. Eckstein & Co. primarily working on in 1979?

4. How much did the accounts for investors increase in 1994?

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

Short Essay Questions

1. In spite of the economic crisis in Russia, what did Meriwether believe about Long-Term's trades?

2. What did Long-Term do when they expected stock prices to fall?

3. Why did bonds lose their value in the 1970's?

4. Why were convergence trades the safest trades made by Long-Term?

5. What did the partners do in the year following the bailout at Long-Term?

6. When investing in Italy, what did Long-Term avoid telling their customers?

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

8. Why did hedge funds make money for managers?

9. Why was Meriwether made a partner at Salomon?

10. Why did Meriwether begin recruiting employees he had worked with at the Arbitrage Group?

(see the answer keys)

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