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This quiz consists of 5 multiple choice and 5 short answer questions through On the Run.

Multiple Choice Questions

1. What notable company went bankrupt in the 1970's?
(a) Penn North Distillery.
(b) Penn Coal.
(c) Penn Weapons Industry.
(d) Penn Central Railroad.

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

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

4. What was Meriwether's team allowed to do, following the Treasury bill deal?
(a) Set Treasury standards.
(b) Coach the office.
(c) Vacation in Italy.
(d) Spread trades.

5. In 1994, why did the yield raise on the thirty year Treasury bond?
(a) It rose 5%.
(b) It dropped 10%.
(c) It dropped 16%.
(d) It rose 16%.

Short Answer Questions

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

2. What is the method of paying a percentage of a bond called?

3. What did Long-Term expect foreign banks to invest?

4. In order for Meriwether's Treasury futures investment to work, what did he need market prices to do?

5. Where did Meriwether work in 1979?

(see the answer key)

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