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

Multiple Choice Questions

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

2. What did Long-Term do when IOs started to fall?
(a) Buy them up.
(b) Lie to investors.
(c) Explain the situation to investors.
(d) Sell their shares.

3. What did Black and Scholes use to calculate market change?
(a) Meriwether's advice.
(b) In depth financial patterns.
(c) Calculus and computer models.
(d) History.

4. Meriwether believed that risk and volatility were what?
(a) Unmanagable.
(b) Quantifiable.
(c) Abstract ideas.
(d) A part of life.

5. What type of strategy did Long-Term employ?
(a) Low risk.
(b) Whatever was dictated by the market.
(c) Moderate risk.
(d) High risk.

Short Answer Questions

1. What group did Meriwether found in 1977?

2. How much of the face value of a bond do buyers typically pay?

3. What was J.F. Eckstein & Co. primarily working on in 1979?

4. What level of risk did Long-Term offer?

5. What company was Kapor the founder of?

(see the answer key)

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