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

Multiple Choice Questions

1. What was the end result of Meriwether's Treasury bill deal?
(a) It lost a lot of money.
(b) It made a lot of money.
(c) It was not a notable deal.
(d) It frightened his colleagues.

2. How was Meriwether's career affected following the Treasury bill deal?
(a) He was made partner.
(b) He became a public speaker.
(c) He lost his job.
(d) He became a regulation advocate.

3. What happened to Meriwether's Treasury bill deal before it was resolved?
(a) It fell apart.
(b) It remained steady.
(c) Big losses.
(d) Huge gains.

4. What did Long-Term do with off-the-run bonds?
(a) Hold them for profit.
(b) Avoid them.
(c) Loan them to other firms.
(d) Unload them quickly.

5. In 1996, Long-Term had achieved thirty times its what?
(a) Proposed value.
(b) Starting capital.
(c) Debt capacity.
(d) Original goal.

6. How much money did Long-Term earn in 1996?
(a) $100 million.
(b) $1 billion.
(c) $2.1 billion.
(d) $500 million.

7. In 1996, what was the response of most of the banks in terms of offering credit financing to Long-Term?
(a) Eager.
(b) Competitive.
(c) Interested.
(d) Interested but wary.

8. What did a dealer from J.F. Eckstein & Co. want from Meriwether in 1979?
(a) Help.
(b) A better financial model.
(c) Empathy.
(d) Real estate tips.

9. What financial crisis did Long-Term make it through that most of the market didn't?
(a) The Switzerland crisis.
(b) The U.S. crisis.
(c) The Germany crisis.
(d) The Mexican crisis.

10. In 1993, what was happening more than usual in America?
(a) Bankruptcy.
(b) Day trading.
(c) Refinancing.
(d) Starvation.

11. Who ran the London office for Long-Term?
(a) Haghani.
(b) Meriwether.
(c) Mullins.
(d) Buffet.

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

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

14. What did Long-Term expect foreign banks to invest?
(a) $10 million.
(b) Only individuals could invest.
(c) $1 million.
(d) $100 million.

15. What did Long-Term do when IOs started to fall?
(a) Explain the situation to investors.
(b) Buy them up.
(c) Lie to investors.
(d) Sell their shares.

Short Answer Questions

1. What was J.F. Eckstein & Co. primarily working on in 1979?

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

3. What type of strategy did Long-Term employ?

4. In 1994, what market did Long-Term begin to express an interest in?

5. Why did Long-Term trade in Italy?

(see the answer keys)

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