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This quiz consists of 5 multiple choice and 5 short answer questions through Bank of Volatility.

Multiple Choice Questions

1. What financial crisis did Long-Term make it through that most of the market didn't?
(a) The Switzerland crisis.
(b) The U.S. crisis.
(c) The Mexican crisis.
(d) The Germany crisis.

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

3. What was the first horrible month Long-Term had?
(a) It never had a horrible month.
(b) June, 1998.
(c) July, 1998.
(d) August, 1998.

4. What were the models Long-Term used unable to predict?
(a) Investor's exact return.
(b) Market collapse.
(c) All of these.
(d) Long-Term's exact income.

5. What year did Meriwether hire Myron Scholes?
(a) 1995.
(b) 1996.
(c) 1993.
(d) 1994.

Short Answer Questions

1. What did Black and Scholes think price changes were?

2. In 1998, what market did Long-Term bet would decline?

3. In 1996, Long-Term was four times as large as what?

4. How much did Long-Term plan to take from its profits?

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

(see the answer key)

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