When Genius Failed Test | Mid-Book Test - Hard

Roger Lowenstein
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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. How was Meriwether's career affected following the Treasury bill deal?

2. What models did Long-Term follow?

3. What unusual event happened when Meriwether began working with Treasury futures?

4. Why did Rosenfeld choose not to co-found Kapor's project?

5. In 1994, why did the yield raise on the thirty year Treasury bond?

Short Essay Questions

1. Although Long-Term was performing so well by 1996, how many Americans knew of the fund's existence?

2. When did Meriwether begin making sales calls for Long-Term?

3. What were the legal limits on hedge fund investors?

4. How did Long-Term respond to firms that would not waive the fee for the haircut?

5. What methods did Black and Scholes use to predict the changes that would take place in the market?

6. What are relative value trades?

7. Why was the investment in Italy a risky one for Long-Term to make?

8. When Meriwether was building his team at the Arbitrage Group, what qualities did he look for?

9. Why was Meriwether made a partner at Salomon?

10. How would a loan from a major bank help the partners at Long-Term make money?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

In the late 1970's, the financial climate was changing due to technology. Examine the changes this brought about in the financial market and how these changes directly affected Meriwether.

Essay Topic 2

There were many warning signs that the profits delivered by Long-Term couldn't last. Yet, many companies did everything possible to keep some investments going at higher and higher levels when they should have slowed. Using greed as a theme, analyze this situation.

Essay Topic 3

Write a brief essay supporting or refuting the following statement, citing examples from the text: Long-Term took part in risky investments as the market became over-saturated.

(see the answer keys)

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