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 word did people often use to describe Long-Term?
(a) Dangerous.
(b) Stupid.
(c) Communist.
(d) Genius.

2. How much equity did Long-Term have hold of in 1997?
(a) $100 million.
(b) $1 billion.
(c) $5 billion.
(d) $0.

3. What was the limitation on borrowing for equity trading?
(a) 40%.
(b) 10%.
(c) 25%.
(d) 50%.

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

5. What was the climate at Long-Term during the Russian financial crisis?
(a) Confident.
(b) Excited.
(c) Standard.
(d) Nervous.

Short Answer Questions

1. In 1996, why was it difficult to continue to find strong profits in arbitrage trades?

2. If the Long-Term fund failed, what would counter parties have to do?

3. In 1996, what was Meriwether encouraging Long-Term to do?

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

5. After the Russian financial crisis, what caused further fluctuations in the market?

Short Essay Questions

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

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

3. During the financial crisis in 1998, where were the partners finding money?

4. What did Standard & Poor downgrade that would affect Long-Term significantly?

5. Who was Jon Corzine?

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

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

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

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

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

(see the answer keys)

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