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This quiz consists of 5 multiple choice and 5 short answer questions through Tug-of-War.

Multiple Choice Questions

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

2. What did the banks and investors use to estimate Long-Term's assets?
(a) Their exposure.
(b) All of these.
(c) History of investments.
(d) Net worth of investors.

3. What level of risk did Long-Term offer?
(a) High.
(b) None.
(c) Low.
(d) Medium.

4. Where did Meriwether work in 1979?
(a) Lehman.
(b) Salomon Brothers.
(c) Long-Term.
(d) Merrill Lynch.

5. Michael Steindardt believed what was the "culprit in 1994"?
(a) Wealth.
(b) Foolish investments.
(c) Leverage.
(d) Poverty.

Short Answer Questions

1. Why did Long-Term trade in Italy?

2. Who helped Meriwether raise money for Long-Term?

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

4. In order for Meriwether's Treasury futures investment to work, what did he need market prices to do?

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

(see the answer key)

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