|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. How much did Long-Term earn in its first year of operation?
2. How much money did Rosenfeld's business bring in?
3. What was practically impossible to determine about Long-Term?
4. In 1996, what was Long-Term seeking from the bank that would handle their credit?
5. Meriwether believed that risk and volatility were what?
Short Essay Questions
1. Why was the investment in Italy a risky one for Long-Term to make?
2. Why did bonds lose their value in the 1970's?
3. Why was it difficult to know the exact amount of assets Long-Term held?
4. What was Long-Term's objective in seeking out a bank to finance their credit?
5. What methods did Black and Scholes use to predict the changes that would take place in the market?
6. What did Long-Term do to limit risk in bond trading?
7. How did Long-Term respond to firms that would not waive the fee for the haircut?
8. How would a loan from a major bank help the partners at Long-Term make money?
9. What did the Black-Scholes model help Long-Term to predict?
10. Why did Meriwether increase his position on Treasury Bill futures in spite of the market fluctuation?
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: Long-Term set out to be a low risk company and exemplified that mission for several years.
Essay Topic 2
Meriwether enjoyed building strong teams to work with. Write a brief essay examining the qualities he sought out in his team members.
Essay Topic 3
Meriwether began his career at Salomon Brothers before starting Long-Term. Write a detailed profile of his career path at Salomon Brothers, answering the following questions.
1) What risk did Meriwether take at Salomon Brothers?
2) What were the challenges and rewards?
3) Why did his career at Salomon Brothers come to an end?
This section contains 544 words
(approx. 2 pages at 300 words per page)