Mid-Book Test - Hard
|Name: _________________________||Period: ___________________|
This test 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?
Essay Topic 1
The international market provided Long-Term with a substantial opportunity for success. Write an essay examining Long-Term's initial involvement in the international market and the results of this investment.
Essay Topic 2
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?
Essay Topic 3
Write a brief essay supporting or refuting the following statement, citing examples from the text: Meriwether fully expected to continue making substantial returns with Long-Term's investment model.
This section contains 540 words
(approx. 2 pages at 300 words per page)