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This quiz consists of 5 multiple choice and 5 short answer questions through The Human Factor.

Multiple Choice Questions

1. How much of the face value of a bond do buyers typically pay?
(a) 25%.
(b) 15%.
(c) 1%.
(d) 10%.

2. Who ran the London office for Long-Term?
(a) Buffet.
(b) Meriwether.
(c) Haghani.
(d) Mullins.

3. In the mid-1990's, what was the ratio of leverage on Wall Street?
(a) 10-1.
(b) 100-1.
(c) 45-1.
(d) 25-1.

4. What was the climate at Long-Term during the Russian financial crisis?
(a) Excited.
(b) Standard.
(c) Confident.
(d) Nervous.

5. What was the dollar amount of the premium Long-Term paid for its loan?
(a) $1 billion.
(b) $289 million.
(c) $200 million.
(d) $100 million.

Short Answer Questions

1. Once in business, what did Long-Term have an easy time getting from banks?

2. What did Long-Term risk losing if they allowed their assets to fall below five hundred million dollars?

3. How did regulators respond to the involvement of banks in the derivatives market?

4. What was the credit limit on hedge funds?

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

(see the answer key)

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