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This quiz consists of 5 multiple choice and 5 short answer questions through Dear Investors.

Multiple Choice Questions

1. What did the traders accept about the financial models they used?
(a) They were expensive.
(b) They removed the element of surprise.
(c) They were imperfect.
(d) They were smarter than humans.

2. Who typically invested in hedge funds?
(a) The Federal Reserve.
(b) Foreign banks.
(c) The general population.
(d) A club of exclusive investors.

3. What is the method of paying a percentage of a bond called?
(a) A percentage price.
(b) A bond fee.
(c) A haircut.
(d) A trim.

4. Who helped Meriwether raise money for Long-Term?
(a) Merrill Lynch.
(b) Salomon Brothers.
(c) Warren Buffet.
(d) No one.

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

Short Answer Questions

1. What is the CFTC short for?

2. What affected bond trading in the 1970's?

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

4. Why did Rosenfeld choose not to co-found Kapor's project?

5. How much did Long-Term earn in its first year of operation?

(see the answer key)

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