When Genius Failed Test | Mid-Book Test - Hard

Roger Lowenstein
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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. How much did the accounts for investors increase in 1994?

2. In 1994, what market did Long-Term begin to express an interest in?

3. What did Meriwether do with his staff?

4. What group did Meriwether found in 1977?

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

Short Essay Questions

1. What was the risk to the market if Long-Term unraveled?

2. In 1996, which significant companies did Long-Term surpass in terms of assets?

3. Why were convergence trades the safest trades made by Long-Term?

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

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

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

7. Following the crisis in Russia, what position did investors take that adversely affected Long-Term?

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

9. When Meriwether reached out to his clients following the Russian crisis, how did he explain the effect of the situation in Russia?

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

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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 2

The academic model Long-Term used for investing proved impressive on many occasions.

1) What were the principles behind the Value-at-Risk models?

2) What were the problems with these models?

3) How did these models impact the investments placed by Long-Term?

Essay Topic 3

Basing your answer on the height of Long-Term's career, compare and contrast several of the companies on Wall Street with Long-Term, citing examples from the text.

(see the answer keys)

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