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

Multiple Choice Questions

1. In 1998, Long-Term expected prices to do what?
(a) Fall.
(b) Stay the same.
(c) Rise.
(d) Fluctuate.

2. What type of strategy did Long-Term employ?
(a) Whatever was dictated by the market.
(b) High risk.
(c) Low risk.
(d) Moderate risk.

3. What level of risk did Long-Term offer?
(a) None.
(b) Medium.
(c) High.
(d) Low.

4. What was the typical scenario for bond investors in 1994?
(a) Loss.
(b) Minimal gains.
(c) Few invested in bonds.
(d) Substantial gains.

5. What did Black and Scholes think price changes were?
(a) Random events.
(b) Common occurences.
(c) Dangerous.
(d) Smart corrections.

Short Answer Questions

1. In 1994, why did the price of bonds drop?

2. Where was the London office for Long-Term located?

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

4. Where was the Long-Term Capital Portfolio stored?

5. What was the first horrible month Long-Term had?

(see the answer key)

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