|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 money did Rosenfeld's business bring in?
2. In order for Meriwether's Treasury futures investment to work, what did he need market prices to do?
3. Who typically invested in hedge funds?
4. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?
5. In 1996, what was Long-Term seeking from the bank that would handle their credit?
Short Essay Questions
1. What are relative value trades?
2. Why was the investment in Italy a risky one for Long-Term to make?
3. Why did Meriwether begin recruiting employees he had worked with at the Arbitrage Group?
4. What surprise happened when Meriwether was trading Treasury Bill futures?
5. Why did Black and Scholes believe that price changes were random?
6. Why were convergence trades the safest trades made by Long-Term?
7. When did Meriwether begin making sales calls for Long-Term?
8. What did the Black-Scholes model help Long-Term to predict?
9. Why did Meriwether increase his position on Treasury Bill futures in spite of the market fluctuation?
10. Why are hedge funds considered low risk?
Write an essay for ONE of the following topics:
Essay Topic 1
When Meriwether set up Long-Term, he had to take many steps to create the company. Write an essay examining the process Meriwether went through to create Long-Term.
Essay Topic 2
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 3
The investment requirements of Long-Term were quite stringent. Citing examples from the text, write an essay examining the investment requirements and opportunity for return for potential Long-Term investors.
This section contains 536 words
(approx. 2 pages at 300 words per page)