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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 companies were selling bonds for Russia?
(a) All of these.
(b) Investment banking firms.
(c) Black market traders.
(d) Mom and pop establishments.

2. What determines the swap rate in a country?
(a) Interest rates on the real estate market.
(b) Interest rates on government debt.
(c) The price of oil.
(d) The price of corn.

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

4. How much did Long-Term plan to take from its profits?
(a) 10%.
(b) 30%.
(c) 15%.
(d) 25%.

5. Who developed the Black-Scholes model?
(a) Jack Salomon.
(b) Myron Scholes.
(c) John Meriwether.
(d) David Black.

Short Answer Questions

1. In bond trading, what are loans backed by collateral called?

2. What percentage of Americans had no knowledge of Long-Term?

3. In 1996, who did Long-Term first approach to handle their credit?

4. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?

5. In 1994, why did the yield raise on the thirty year Treasury bond?

(see the answer key)

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