|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. When Russia began to default on its loans, what did people start doing with their high risk bonds?
2. What notable player was on vacation during the crisis in Russia?
3. How many banks stepped forward to help bail out Long-Term?
4. What year was the Federal Reserve System created?
5. What did Long-Term think about the financial crisis that hit in August of 1998?
Short Essay Questions
1. In 1997, what was Meriwether encouraging his employees to do?
2. By the end of August 1998, what did the movement in the bond market look like?
3. During the financial crisis in 1998, where were the partners finding money?
4. Since Long-Term expected stock prices would fall, what did they sell insurance against?
5. Who warned Long-Term about making trades that counted on falling stock prices?
6. Why did banks and investment banks get involved in the derivatives market?
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. Why did the issue in Russia cost Long-Term money on an initial basis?
9. What did Standard & Poor downgrade that would affect Long-Term significantly?
10. Following the crisis in Russia, what position did investors take that adversely affected Long-Term?
Write an essay for ONE of the following topics:
Essay Topic 1
The international market provided Long-Term with a substantial opportunity for success. Write an essay examining Long-Term's initial involvement in the international market and the results of this investment.
Essay Topic 2
Meriwether enjoyed building strong teams to work with. Write a brief essay examining the qualities he sought out in his team members.
Essay Topic 3
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.
This section contains 472 words
(approx. 2 pages at 300 words per page)