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

Multiple Choice Questions

1. In bond trading, what are loans backed by collateral called?
(a) Repo financing.
(b) Fair financing.
(c) Mini trades.
(d) Exclusive trades.

2. In 1994, why did the yield raise on the thirty year Treasury bond?
(a) It dropped 16%.
(b) It rose 5%.
(c) It rose 16%.
(d) It dropped 10%.

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

4. In 1996, Long-Term was four times as large as what?
(a) The largest hedge fund.
(b) The U.S. Treasury.
(c) A small European country.
(d) The Mexican Treasury.

5. What percentage of Americans had no knowledge of Long-Term?
(a) 75%.
(b) 99%.
(c) 50%.
(d) 10%.

Short Answer Questions

1. What did the banks and investors use to estimate Long-Term's assets?

2. Why did Long-Term trade in Italy?

3. What did Black and Scholes use to calculate market change?

4. What did Long-Term want to do for investors?

5. In 1996, Long-Term was two and a half times larger than what company?

(see the answer key)

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