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 was Long-Term's signature trade?

2. When did Long-Term start losing money?

3. How much money did Chase loan Long-Term so that they could continue to clear trades?

4. Why was Long-Term unable to get out of the situation with Russia?

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

Short Essay Questions

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

2. How much of Long-Term did the Union Bank of Switzerland buy on a hedge?

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

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

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

6. What contributes to the estimation of market volatility?

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

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

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

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.

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

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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