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. When markets get jumpy, what begins to rise?

2. Once the financial market in Russia collapsed, what did people stop trading?

3. What word did people often use to describe Long-Term?

4. What was the credit limit on hedge funds?

5. In 1996, why was it difficult to continue to find strong profits in arbitrage trades?

Short Essay Questions

1. When did huge losses begin for Long-Term and why?

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

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

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

5. What was the goal of the Federal Reserve when it was created?

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

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

8. Who warned Long-Term about making trades that counted on falling stock prices?

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

10. Who was Jon Corzine?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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 2

When Long-Term achieved major profits in its first year, Meriwether wrote a letter to investors warning against such a strong future performance.

1) Why did Meriwether feel it was important to communicate with his investors?

2) What warnings did Meriwether share with his investors?

3) Why did Meriwether feel it necessary to communicate at this level?

Essay Topic 3

Write a brief essay supporting or refuting the following statement, citing examples from the text: Meriwether fully expected to continue making substantial returns with Long-Term's investment model.

(see the answer keys)

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