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

Multiple Choice Questions

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

2. What was practically impossible to determine about Long-Term?
(a) Why it was doing so well.
(b) Where it was located.
(c) Who was in charge.
(d) Actual fund assets.

3. In the 1970's, what type of trading was considered dull?
(a) Securities.
(b) Corn.
(c) Gasoline.
(d) Bond.

4. Once in business, what did Long-Term have an easy time getting from banks?
(a) Money.
(b) Personal information.
(c) Workers.
(d) Endorsements.

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

Short Answer Questions

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

2. Where was the London office for Long-Term located?

3. In 1994, why did the yield raise on the thirty year Treasury bond?

4. Why did Long-Term trade in Italy?

5. Who developed the Black-Scholes model?

(see the answer key)

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