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

Multiple Choice Questions

1. What determines the swap rate in a country?
(a) Interest rates on the real estate market.
(b) The price of oil.
(c) The price of corn.
(d) Interest rates on government debt.

2. What factor was forcing those with hedge funds to sell?
(a) The Fed's involvement.
(b) Ample credit.
(c) Toxic assets.
(d) Lack of credit.

3. In order for Meriwether's Treasury futures investment to work, what did he need market prices to do?
(a) Fluctuate drastically.
(b) None of these.
(c) Converge.
(d) Remain the same.

4. How much money did Long-Term lose on Wall Street?
(a) $780,000.
(b) $2 billion.
(c) $4.5 billion.
(d) $900 million.

5. How many banks stepped forward to help bail out Long-Term?
(a) 20.
(b) 16.
(c) 30.
(d) 2.

Short Answer Questions

1. What award did Merton and Scholes win for economics?

2. In the mid-1990's, what was the ratio of leverage on Wall Street?

3. Who typically invested in hedge funds?

4. What was Long-Term's signature trade based on?

5. What did Long-Term expect foreign banks to invest?

(see the answer key)

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