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 notable player was on vacation during the crisis in Russia?
(a) The president of the United States.
(b) The president of Russia.
(c) Warren Buffet.
(d) Alan Greenspan.

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

3. How much money did Chase loan Long-Term so that they could continue to clear trades?
(a) $752 million.
(b) $5 million.
(c) $475 million.
(d) $10 million.

4. To create a paired-share, what is common stock partnered with?
(a) Preferred stock.
(b) Shorted stocks.
(c) Private stock.
(d) Bond deals.

5. If the Long-Term fund failed, what would counter parties have to do?
(a) Buy more stocks.
(b) Nothing.
(c) Sell.
(d) Give it money to keep going.

Short Answer Questions

1. What was the limitation on borrowing for equity trading?

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

3. By the end of August 1998, what market had practically stopped trading altogether?

4. How many banks stepped forward to help bail out Long-Term?

5. After the first bad year experienced by Long-Term, what did its overall record look like?

Short Essay Questions

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

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

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

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

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

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

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

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

9. By the end of August 1998, what did the movement in the bond market look like?

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

(see the answer keys)

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