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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.
Multiple Choice Questions
1. How much of the face value of a bond do buyers typically pay?
(a) 1%.
(b) 25%.
(c) 15%.
(d) 10%.
2. What type of government paper was bought in Italy?
(a) Fluctuating rate.
(b) Deeds to monuments.
(c) Italian money.
(d) Floating rate.
3. What percentage of Americans had no knowledge of Long-Term?
(a) 50%.
(b) 99%.
(c) 75%.
(d) 10%.
4. What level of risk did Long-Term offer?
(a) High.
(b) None.
(c) Low.
(d) Medium.
5. In 1996, Long-Term was four times as large as what?
(a) The U.S. Treasury.
(b) A small European country.
(c) The largest hedge fund.
(d) The Mexican Treasury.
Short Answer Questions
1. Where was Robert C. Merton working when Meriwether hired him?
2. What was practically impossible to determine about Long-Term?
3. In 1996, who did Long-Term first approach to handle their credit?
4. What did the Black-Scholes model believe was constant?
5. When Meriwether increased his position in Treasury futures, what did he expect the market to do?
Short Essay Questions
1. Why were convergence trades the safest trades made by Long-Term?
2. When Meriwether was building his team at the Arbitrage Group, what qualities did he look for?
3. Why was the investment in Italy a risky one for Long-Term to make?
4. When additional investors returned to the Italian market, what did Long-Term do?
5. How would a loan from a major bank help the partners at Long-Term make money?
6. When investing in Italy, what did Long-Term avoid telling their customers?
7. What was Long-Term's objective in seeking out a bank to finance their credit?
8. When did Meriwether begin making sales calls for Long-Term?
9. What methods did Black and Scholes use to predict the changes that would take place in the market?
10. Why did Meriwether increase his position on Treasury Bill futures in spite of the market fluctuation?
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This section contains 509 words (approx. 2 pages at 300 words per page) |
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