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 year was the Federal Reserve System created?

2. On what date did Russia declare a debt moratorium?

3. Who suspended arbitrage operations in April 1998?

4. What are some of the new markets Long-Term looked into in 1997?

5. After the meeting with the Fed, a market movement of what percentage could have ended Long-Term?

Short Essay Questions

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

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

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

4. In terms of the spreads in 1998, what was the difference between what Long-Term expected them to do and what they actually did?

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

6. What was the financial climate when Merton and Scholes were awarded the Nobel Prize?

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

8. Who was Jon Corzine?

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

10. Why did banks and investment banks get involved in the derivatives market?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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 2

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 3

There were many warning signs that the profits delivered by Long-Term couldn't last. Yet, many companies did everything possible to keep some investments going at higher and higher levels when they should have slowed. Using greed as a theme, analyze this situation.

(see the answer keys)

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