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

Multiple Choice Questions

1. In 1996, what was the second bank Long-Term approached about financing their credit?
(a) International Banking System.
(b) The Italian Republic of Banks.
(c) Union Bank of Switzerland.
(d) National Bank of Russia.

2. After the meeting with the Fed, a market movement of what percentage could have ended Long-Term?
(a) 10%.
(b) 1%.
(c) 25%.
(d) 30%.

3. What did the traders accept about the financial models they used?
(a) They were expensive.
(b) They removed the element of surprise.
(c) They were imperfect.
(d) They were smarter than humans.

4. In August 1998, how far down was Long-Term for the month?
(a) 60%.
(b) 44%.
(c) 10%.
(d) 25%.

5. After the Russian financial crisis, what caused further fluctuations in the market?
(a) Small time investors.
(b) Panicked investors.
(c) Interest from big oil.
(d) Interest from the IRS.

Short Answer Questions

1. What notable invention changed the face of trading in the 1970's?

2. What type of funds gained popularity in the 1990's?

3. When Russia began to default on its loans, what did people start doing with their high risk bonds?

4. Why was Long-Term unable to get out of the situation with Russia?

5. Who did most funds have to be registered with?

(see the answer key)

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