When Genius Failed Test | Final 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 notable player was on vacation during the crisis in Russia?

2. What was the dollar amount of the premium Long-Term paid for its loan?

3. When Long-Term met with the Fed, it was obvious they did not have enough money to make it through what?

4. What companies were selling bonds for Russia?

5. What did Long-Term think about the financial crisis that hit in August of 1998?

Short Essay Questions

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

2. In spite of the economic crisis in Russia, what did Meriwether believe about Long-Term's trades?

3. What did Long-Term do when they expected stock prices to fall?

4. What strategy led to Long-Term's downfall during the Russian financial crisis?

5. Why were regulators concerned about the volume of banks and investment banks involved in the derivatives market?

6. Since Long-Term expected stock prices would fall, what did they sell insurance against?

7. During the financial crisis in 1998, where were the partners finding money?

8. Following the financial crisis in Russia, what did the partners do to begin raising money?

9. In 1997, what was Meriwether encouraging his employees to do?

10. What did Standard & Poor downgrade that would affect Long-Term significantly?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Meriwether began his career at Salomon Brothers before starting Long-Term. Write a detailed profile of his career path at Salomon Brothers, answering the following questions.

1) What risk did Meriwether take at Salomon Brothers?

2) What were the challenges and rewards?

3) Why did his career at Salomon Brothers come to an end?

Essay Topic 2

When Meriwether set up Long-Term, he had to take many steps to create the company. Write an essay examining the process Meriwether went through to create Long-Term.

Essay Topic 3

When Long-Term was faced with financial turmoil, it took only five weeks for it to lose staggering amounts of money. Examine the following points:

1) What was the financial profile of Long-Term prior to Russia's debt default?

2) What did the financial profile change so drastically?

3) What moves did Long-Term make to correct the situation and why were they ineffective?

(see the answer keys)

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