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

Multiple Choice Questions

1. In the mid-1990's, what was the ratio of leverage on Wall Street?
(a) 25-1.
(b) 100-1.
(c) 45-1.
(d) 10-1.

2. In 1998, what market did Long-Term bet would decline?
(a) The Latin market.
(b) The Russian market.
(c) The U.S. market.
(d) The Asian market.

3. In its first bad year, what did Long-Term maintain?
(a) A great workforce.
(b) A strong energy.
(c) A good reputation.
(d) All of these.

4. What did the Black-Scholes model believe was constant?
(a) Volatility.
(b) Meriwether's enthusiasm.
(c) Growth.
(d) Income.

5. When did the Russian market begin to fail?
(a) May 1998.
(b) April 1998.
(c) August 1998.
(d) September 1998.

Short Answer Questions

1. In 1996, why was it difficult to continue to find strong profits in arbitrage trades?

2. To create a paired-share, what is common stock partnered with?

3. What was Meriwether's team allowed to do, following the Treasury bill deal?

4. In 1996, what was the response of most of the banks in terms of offering credit financing to Long-Term?

5. In 1998, what act led Long-Term to a fall?

(see the answer key)

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