|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. By the end of 1996, what was the status of the credit financing Long-Term wanted?
2. Who helped Meriwether raise money for Long-Term?
3. What were popular pools in 1993?
4. Once in business, what did Long-Term have an easy time getting from banks?
5. What was practically impossible to determine about Long-Term?
Short Essay Questions
1. Why was Meriwether made a partner at Salomon?
2. Although Long-Term was performing so well by 1996, how many Americans knew of the fund's existence?
3. What did the Black-Scholes model help Long-Term to predict?
4. What did Long-Term do to limit risk in bond trading?
5. When did Meriwether begin making sales calls for Long-Term?
6. When investing in Italy, what did Long-Term avoid telling their customers?
7. Why were convergence trades the safest trades made by Long-Term?
8. What was Meriwether's business model for Long-Term?
9. Why are hedge funds considered low risk?
10. By the time Long-Term had been in business for two years, how did it compare to other old Wall Street companies?
Write an essay for ONE of the following topics:
Essay Topic 1
Write a brief essay supporting or refuting the following statement, citing examples from the text: The irresponsible management of Long-Term by the partners led to its downfall.
Essay Topic 2
As Long-Term became more and more successful, many banks and investment firms were eager to work with the company. Examine the various ways banks and investment firms offered advantages to Long-Term and why.
Essay Topic 3
When Long-Term was faced with financial turmoil, it took only five weeks for it to lose staggering amounts of money. Examine the following points:
1) What was the financial profile of Long-Term prior to Russia's debt default?
2) What did the financial profile change so drastically?
3) What moves did Long-Term make to correct the situation and why were they ineffective?
This section contains 518 words
(approx. 2 pages at 300 words per page)