When Genius Failed Test | Lesson Plans Mid-Book Test - Hard

Roger Lowenstein
This set of Lesson Plans consists of approximately 107 pages of tests, essay questions, lessons, and other teaching materials.
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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 Topics

Essay Topic 1

When Long-Term achieved major profits in its first year, Meriwether wrote a letter to investors warning against such a strong future performance.

1) Why did Meriwether feel it was important to communicate with his investors?

2) What warnings did Meriwether share with his investors?

3) Why did Meriwether feel it necessary to communicate at this level?

Essay Topic 2

In the late 1970's, the financial climate was changing due to technology. Examine the changes this brought about in the financial market and how these changes directly affected Meriwether.

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.

(see the answer keys)

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