When Genius Failed Test | Final Test - Medium

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 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. What was the dollar amount of the premium Long-Term paid for its loan?
(a) $200 million.
(b) $1 billion.
(c) $100 million.
(d) $289 million.

2. When did the Russian market begin to fail?
(a) September 1998.
(b) August 1998.
(c) May 1998.
(d) April 1998.

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

4. In a letter to clients, to what did Long-Term attribute the decrease in profits?
(a) Widening spreads.
(b) Irresponsibility in foreign nations.
(c) Poor margins.
(d) Foolish investments.

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

Short Answer Questions

1. What was the first horrible month Long-Term had?

2. What regulation did Long-Term bypass when trading equities?

3. In 1998, who published Meriwether's letter to his clients?

4. In August 1998, how far down was Long-Term for the month?

5. What typically happens to stock prices when a merger is revealed?

Short Essay Questions

1. Who was Jon Corzine?

2. Why were regulators concerned about the volume of banks and investment banks involved in the derivatives market?

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

4. How much of Long-Term did the Union Bank of Switzerland buy on a hedge?

5. When Meriwether reached out to his clients following the Russian crisis, how did he explain the effect of the situation in Russia?

6. Following the financial crisis in Russia, what did the partners do to begin raising money?

7. What move did Salomon make that surprised Long-Term?

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

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

10. Who warned Long-Term about making trades that counted on falling stock prices?

(see the answer keys)

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