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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) 1%.
(b) 25%.
(c) 15%.
(d) 10%.

2. What are some of the new markets Long-Term looked into in 1997?
(a) Paired-shares.
(b) All of these.
(c) Equities.
(d) Stocks.

3. What did Long-Term do when IOs started to fall?
(a) Sell their shares.
(b) Buy them up.
(c) Explain the situation to investors.
(d) Lie to investors.

4. How much equity did Long-Term have hold of in 1997?
(a) $1 billion.
(b) $0.
(c) $100 million.
(d) $5 billion.

5. What did Long-Term do with off-the-run bonds?
(a) Avoid them.
(b) Hold them for profit.
(c) Unload them quickly.
(d) Loan them to other firms.

Short Answer Questions

1. What were popular pools in 1993?

2. Who ran the London office for Long-Term?

3. During the turmoil of 1998, investors avoided Long-Term because they were trying to avoid what?

4. In a letter to clients, to what did Long-Term attribute the decrease in profits?

5. What is the method of paying a percentage of a bond called?

(see the answer key)

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