Mid-Book Test - Hard
|Name: _____________________________||Period: ___________________________|
This quiz consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. What did Long-Term do when IOs started to fall?
2. What did Meriwether warn his investors against in 1994?
3. What did Meriwether do with his staff?
4. What group did Meriwether found in 1977?
5. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?
Short Essay Questions
1. When investing in Italy, what did Long-Term avoid telling their customers?
2. Why did the issue in Russia cost Long-Term money on an initial basis?
3. Why were regulators concerned about the volume of banks and investment banks involved in the derivatives market?
4. What were the legal limits on hedge fund investors?
5. How did Long-Term respond to firms that would not waive the fee for the haircut?
6. In spite of the economic crisis in Russia, what did Meriwether believe about Long-Term's trades?
7. In terms of the spreads in 1998, what was the difference between what Long-Term expected them to do and what they actually did?
8. Following the financial crisis in Russia, what did the partners do to begin raising money?
9. What dictates whether or interest only securities rise or fall?
10. What surprise happened when Meriwether was trading Treasury Bill futures?
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.
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.
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 547 words
(approx. 2 pages at 300 words per page)