|Name: _________________________||Period: ___________________|
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. What was the climate at Long-Term during the Russian financial crisis?
2. When Russia began to default on its loans, what did people start doing with their high risk bonds?
3. In 1998, who published Meriwether's letter to his clients?
4. To create a paired-share, what is common stock partnered with?
5. What put pressure on the currency in Brazil?
Short Essay Questions
1. Why were regulators concerned about the volume of banks and investment banks involved in the derivatives market?
2. What contributes to the estimation of market volatility?
3. What was the financial climate when Merton and Scholes were awarded the Nobel Prize?
4. When did huge losses begin for Long-Term and why?
5. In 1997, what was Meriwether encouraging his employees to do?
6. What was the risk to the market if Long-Term unraveled?
7. What was the Fed's response to Long-Term's exposure?
8. What was the goal of the Federal Reserve when it was created?
9. What did Standard & Poor downgrade that would affect Long-Term significantly?
10. How much of Long-Term did the Union Bank of Switzerland buy on a hedge?
Write an essay for ONE of the following topics:
Essay Topic 1
Basing your answer on the height of Long-Term's career, compare and contrast several of the companies on Wall Street with Long-Term, citing examples from the text.
Essay Topic 2
Examine one of the following forms of investment vehicles:
- Hedge funds.
- Value funds.
Answering the follow questions:
- What are the principals of this form of investment?
- What was Meriwether's experience with this form of investment?
- To what extent did the general public participate in this form of investment?
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 512 words
(approx. 2 pages at 300 words per page)