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. By the end of August 1998, what market had practically stopped trading altogether?

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

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

4. In 1998, what were many hedge funds selling insurance against?

5. What trading date dropped Long-Term below $1 billion in equity?

Short Essay Questions

1. What was the Fed's response to Long-Term's exposure?

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

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

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

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

6. What move did Salomon make that surprised Long-Term?

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

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

9. What contributes to the estimation of market volatility?

10. Who was Jon Corzine?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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?

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: Long-Term took part in risky investments as the market became over-saturated.

(see the answer keys)

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