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

Multiple Choice Questions

1. What did the Black-Scholes model believe was constant?
(a) Volatility.
(b) Growth.
(c) Meriwether's enthusiasm.
(d) Income.

2. What year did Meriwether hire Myron Scholes?
(a) 1993.
(b) 1995.
(c) 1994.
(d) 1996.

3. During the time period in "Hedge Fund", how many people were millionaires due to the stock market?
(a) 1 million.
(b) 5 million.
(c) 20 million.
(d) 6 million.

4. What did Black and Scholes think price changes were?
(a) Dangerous.
(b) Smart corrections.
(c) Random events.
(d) Common occurences.

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

Short Answer Questions

1. Where was David W. Mullins working when Meriwether hired him?

2. Who ran the London office for Long-Term?

3. What did the traders accept about the financial models they used?

4. When Meriwether increased his position in Treasury futures, what did he expect the market to do?

5. What were the models Long-Term used unable to predict?

(see the answer key)

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