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

Multiple Choice Questions

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

2. What did Rosenfeld and his friend develop?
(a) A financial museum.
(b) Energy bars.
(c) Software.
(d) Energy drinks.

3. What unusual event happened when Meriwether began working with Treasury futures?
(a) He lost millions.
(b) The price fell.
(c) The U.S. government collapsed.
(d) The price rose.

4. What did Long-Term do with off-the-run bonds?
(a) Avoid them.
(b) Unload them quickly.
(c) Hold them for profit.
(d) Loan them to other firms.

5. In 1993, what was happening more than usual in America?
(a) Day trading.
(b) Bankruptcy.
(c) Starvation.
(d) Refinancing.

Short Answer Questions

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

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

3. What did Black and Scholes think price changes were?

4. What type of government paper was bought in Italy?

5. How much money did Meriwether need to start Long-Term?

(see the answer key)

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