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This quiz consists of 5 multiple choice and 5 short answer questions through The Fall.

Multiple Choice Questions

1. What did Long-Term do when IOs started to fall?
(a) Explain the situation to investors.
(b) Lie to investors.
(c) Buy them up.
(d) Sell their shares.

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

3. In 1998, Long-Term expected prices to do what?
(a) Rise.
(b) Stay the same.
(c) Fluctuate.
(d) Fall.

4. How much did Long-Term earn in its first year of operation?
(a) 5%.
(b) 10%.
(c) 75%.
(d) 28%.

5. What are some of the new markets Long-Term looked into in 1997?
(a) Paired-shares.
(b) Equities.
(c) All of these.
(d) Stocks.

Short Answer Questions

1. How was Meriwether's career affected following the Treasury bill deal?

2. What was Long-Term's signature trade?

3. What did the Fed Chairman want to remove in an effort to create liquidity in the market?

4. What was the internal climate at Long-Term in 1998?

5. What was the limitation on borrowing for equity trading?

(see the answer key)

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