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

Multiple Choice Questions

1. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?
(a) Millenium Fund.
(b) Quantum Fund.
(c) Treasury Fund.
(d) Endowment Fund.

2. To create a paired-share, what is common stock partnered with?
(a) Bond deals.
(b) Private stock.
(c) Preferred stock.
(d) Shorted stocks.

3. How much of the face value of a bond do buyers typically pay?
(a) 15%.
(b) 10%.
(c) 25%.
(d) 1%.

4. When Meriwether increased his position in Treasury futures, what did he expect the market to do?
(a) Perform typically.
(b) Collapse.
(c) Drop substantially.
(d) Rise sharply overnight.

5. What did the incident on August 21 cost Long-Term?
(a) $1 billion.
(b) $150 million.
(c) $200 million.
(d) $2 billion.

Short Answer Questions

1. When markets get jumpy, what begins to rise?

2. What models did Long-Term follow?

3. Where did the private contracts Long-Term made in 1998 trade?

4. In 1998, what market did Long-Term bet would decline?

5. In its first bad year, what did Long-Term maintain?

(see the answer key)

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