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This quiz consists of 5 multiple choice and 5 short answer questions through At the Fed.

Multiple Choice Questions

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

2. Who charged Long-Term much lower fees than other clients?
(a) NYSE.
(b) The hospitality industry.
(c) The Federal Reserve.
(d) Brokerage firms.

3. When the Fed visited Long-Term, what did Hilibrand show them?
(a) The risk aggregator.
(b) The new buildings.
(c) The door.
(d) His recent financial model.

4. Who was the Fed Chairman in 1997?
(a) Madeleine Albright.
(b) Warren Buffet.
(c) Alan Greenspan.
(d) Hillary Clinton.

5. How much money did Meriwether need to start Long-Term?
(a) $1 billion.
(b) $2.5 billion.
(c) $100,000.
(d) $50 million.

Short Answer Questions

1. In 1996, Long-Term had achieved thirty times its what?

2. In 1996, how much did Long-Term have in assets?

3. What did the banks and investors use to estimate Long-Term's assets?

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

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

(see the answer key)

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