View a FREE sample

This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What were the models Long-Term used unable to predict?
(a) All of these.
(b) Market collapse.
(c) Investor's exact return.
(d) Long-Term's exact income.

2. Where were Italian bonds sold by Long-Term?
(a) Directly to investors.
(b) Swaps.
(c) Under the table.
(d) Cayman Islands.

3. How many employees were with Long-Term in 1996?
(a) Less than a dozen.
(b) A couple dozen.
(c) Five hundred.
(d) Five.

4. What notable invention changed the face of trading in the 1970's?
(a) The cell phone.
(b) The video camera.
(c) The scientific calculator.
(d) The computer.

5. What was the typical scenario for bond investors in 1994?
(a) Loss.
(b) Substantial gains.
(c) Minimal gains.
(d) Few invested in bonds.

6. What models did Long-Term follow?
(a) Value-at-Risk.
(b) Black-Scholes.
(c) All of these.
(d) Merton.

7. In bond trading, what are loans backed by collateral called?
(a) Fair financing.
(b) Exclusive trades.
(c) Repo financing.
(d) Mini trades.

8. How much money did Rosenfeld's business bring in?
(a) Five million.
(b) Two million.
(c) A couple thousand.
(d) Hundreds of thousands.

9. Where was Robert C. Merton working when Meriwether hired him?
(a) Harvard.
(b) NASA.
(c) Wall Street.
(d) The Federal Exchange Commission.

10. What is the method of paying a percentage of a bond called?
(a) A haircut.
(b) A percentage price.
(c) A bond fee.
(d) A trim.

11. What did the letter Meriwether sent to his clients claim it was difficult to do with Long-Term?
(a) Get a job.
(b) Lose money.
(c) Take legal action.
(d) Make money.

12. In 1996, Long-Term was two and a half times larger than what company?
(a) Bank of America.
(b) Lehman Brothers.
(c) Fidelity Magellan.
(d) Chase.

13. Where was David W. Mullins working when Meriwether hired him?
(a) Yale School of Finance.
(b) Salomon Brothers.
(c) The United Nations.
(d) Federal Reserve.

14. Who became the temporary CEO of Meriwether's group when scandal hit?
(a) John Meriwether.
(b) Warren Buffet.
(c) J.F. Salomon.
(d) Paul Mozer.

15. What group did Meriwether found in 1977?
(a) The Commanders.
(b) The Arbitrage Group.
(c) Smith & Meriwether Co.
(d) The Meegen Group.

Short Answer Questions

1. In 1996, Long-Term was four times as large as what?

2. During the time period in "Hedge Fund", how many people were millionaires due to the stock market?

3. What hedge fund caused a pound devaluation in Europe but made over a billion dollars?

4. Meriwether believed that risk and volatility were what?

5. What did Long-Term want to do for investors?

(see the answer keys)

This section contains 386 words (approx. 2 pages at 300 words per page) View a FREE sample