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. Who was withdrawing from the hedge fund markets?
(a) Large investment firms.
(b) Foreign countries.
(c) Long-Term.
(d) Small investment firms.

2. How did regulators respond to the involvement of banks in the derivatives market?
(a) They were worried.
(b) They encouraged it.
(c) They were delighted.
(d) There were not concerned.

3. In 1996, what was Meriwether encouraging Long-Term to do?
(a) Stick with the tried and true.
(b) Investigate new territory.
(c) Hire new employees.
(d) Break the law.

4. What companies were selling bonds for Russia?
(a) Mom and pop establishments.
(b) Investment banking firms.
(c) All of these.
(d) Black market traders.

5. By the end of August 1998, what market had practically stopped trading altogether?
(a) International markets.
(b) Gold markets.
(c) Bond markets.
(d) Stock markets.

Short Answer Questions

1. What did Long-Term avoid by working with derivatives instead of stocks?

2. In 1998, what act led Long-Term to a fall?

3. Who was the Fed Chairman in 1997?

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

5. In 1998, what were many hedge funds selling insurance against?

Short Essay Questions

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

2. In 1997, what was Meriwether encouraging his employees to do?

3. Since Long-Term expected stock prices would fall, what did they sell insurance against?

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

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

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

7. Who was Jon Corzine?

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

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

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

(see the answer keys)

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