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

Multiple Choice Questions

1. Who gains from working with hedge funds?
(a) Managers.
(b) The government.
(c) Impoverished countries.
(d) Women.

2. What did Long-Term want to do for investors?
(a) Make money.
(b) Build trust.
(c) All of these.
(d) Limit risk.

3. How much money did Meriwether need to start Long-Term?
(a) $100,000.
(b) $50 million.
(c) $1 billion.
(d) $2.5 billion.

4. How much did Long-Term plan to take from its profits?
(a) 30%.
(b) 25%.
(c) 10%.
(d) 15%.

5. What group did Meriwether found in 1977?
(a) The Commanders.
(b) The Meegen Group.
(c) The Arbitrage Group.
(d) Smith & Meriwether Co.

Short Answer Questions

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

2. In the 1970's, what type of trading was considered dull?

3. Where was the Long-Term Capital Portfolio stored?

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

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

(see the answer key)

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