When Genius Failed Test | Mid-Book Test - Hard

Roger Lowenstein
This set of Lesson Plans consists of approximately 99 pages of tests, essay questions, lessons, and other teaching materials.
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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. Michael Steindardt believed what was the "culprit in 1994"?

2. What financial crisis did Long-Term make it through that most of the market didn't?

3. Who gains from working with hedge funds?

4. What did Meriwether do with his staff?

5. Who developed the Black-Scholes model?

Short Essay Questions

1. What are relative value trades?

2. Why was Meriwether made a partner at Salomon?

3. What was Meriwether's group at Salomon given the authority to do?

4. Why did bonds lose their value in the 1970's?

5. What did the Black-Scholes model help Long-Term to predict?

6. Although Long-Term was performing so well by 1996, how many Americans knew of the fund's existence?

7. What was Long-Term's objective in seeking out a bank to finance their credit?

8. What surprise happened when Meriwether was trading Treasury Bill futures?

9. When Meriwether was building his team at the Arbitrage Group, what qualities did he look for?

10. What were the legal limits on hedge fund investors?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Examine one of the following forms of investment vehicles:

- Hedge funds.

- Value funds.

- Bonds.

Answering the follow questions:

- What are the principals of this form of investment?

- What was Meriwether's experience with this form of investment?

- To what extent did the general public participate in this form of investment?

Essay Topic 2

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.

Essay Topic 3

The Fed has a major voice in the financial decisions in the United States. Examine the function of the Fed and the actions that it took that inadvertently played a part in Long-Term's success.

(see the answer keys)

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