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

Multiple Choice Questions

1. How much of the face value of a bond do buyers typically pay?
(a) 15%.
(b) 10%.
(c) 1%.
(d) 25%.

2. Where was the Long-Term Capital Portfolio stored?
(a) Cayman Islands.
(b) Bermuda.
(c) Germany.
(d) Switzerland.

3. Who did most funds have to be registered with?
(a) SEC.
(b) The Fed.
(c) Most funds did not have to be registered.
(d) CFTC.

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

5. Once in business, what did Long-Term have an easy time getting from banks?
(a) Money.
(b) Workers.
(c) Personal information.
(d) Endorsements.

Short Answer Questions

1. What type of strategy did Long-Term employ?

2. In 1994, what market did Long-Term begin to express an interest in?

3. How long did Long-Term expect their investors to commit?

4. What is the CFTC short for?

5. What did Long-Term do when IOs started to fall?

(see the answer key)

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