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
Those involved at the top levels of Long-Term were given respect, money and opportunity. Write a brief essay analyzing some of the advantages a career at Long-Term gave many of the partners, citing examples from the text.
Essay Topic 2
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.
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 533 words
(approx. 2 pages at 300 words per page)