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. What is the method of paying a percentage of a bond called?

2. In 1996, Long-Term was two and a half times larger than what company?

3. What affected bond trading in the 1970's?

4. What did the banks and investors use to estimate Long-Term's assets?

5. In 1996, how much did Long-Term have in assets?

Short Essay Questions

1. Why did Black and Scholes believe that price changes were random?

2. On what did Long-Term base the claim that it was difficult to lose money with them?

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

4. What dictates whether or interest only securities rise or fall?

5. What did Long-Term do to limit risk in bond trading?

6. Why was Meriwether made a partner at Salomon?

7. Why was it difficult to know the exact amount of assets Long-Term held?

8. What methods did Black and Scholes use to predict the changes that would take place in the market?

9. What was Meriwether's business model for Long-Term?

10. When investing in Italy, what did Long-Term avoid telling their customers?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

As Long-Term became more and more successful, many banks and investment firms were eager to work with the company. Examine the various ways banks and investment firms offered advantages to Long-Term and why.

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 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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