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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 did the incident on August 21 cost Long-Term?

2. In the mid-1990's, what was the ratio of leverage on Wall Street?

3. When Russia first experienced turmoil, Long-Term was confident that what would happen?

4. In August 1998, how far down was Long-Term for the year-to-date?

5. What did the Fed Chairman want to remove in an effort to create liquidity in the market?

Short Essay Questions

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

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

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

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

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

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

7. What contributes to the estimation of market volatility?

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

9. By the end of August 1998, what did the movement in the bond market look like?

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

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

In the late 1970's, the financial climate was changing due to technology. Examine the changes this brought about in the financial market and how these changes directly affected Meriwether.

(see the answer keys)

This section contains 530 words (approx. 2 pages at 300 words per page) View a FREE sample