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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. What did the Black-Scholes model believe was constant?
(a) Growth.
(b) Volatility.
(c) Meriwether's enthusiasm.
(d) Income.
2. What were popular pools in 1993?
(a) Mortgage.
(b) Electricity.
(c) Oil.
(d) Green energy.
3. In 1996, what was the second bank Long-Term approached about financing their credit?
(a) The Italian Republic of Banks.
(b) National Bank of Russia.
(c) Union Bank of Switzerland.
(d) International Banking System.
4. How much did the accounts for investors increase in 1994?
(a) 5%.
(b) 10%.
(c) 20%.
(d) 50%.
5. Where were Italian bonds sold by Long-Term?
(a) Cayman Islands.
(b) Under the table.
(c) Swaps.
(d) Directly to investors.
Short Answer Questions
1. What type of government paper was bought in Italy?
2. Who did most funds have to be registered with?
3. In 1996, the first bank Long-Term approached regarding credit deemed Long-Term as what?
4. Who charged Long-Term much lower fees than other clients?
5. By the end of 1996, what was the status of the credit financing Long-Term wanted?
Short Essay Questions
1. Why was it difficult to know the exact amount of assets Long-Term held?
2. What did Long-Term do to limit risk in bond trading?
3. In 1996, which significant companies did Long-Term surpass in terms of assets?
4. What methods did Black and Scholes use to predict the changes that would take place in the market?
5. What did the Black-Scholes model help Long-Term to predict?
6. Why did hedge funds make money for managers?
7. By the time Long-Term had been in business for two years, how did it compare to other old Wall Street companies?
8. When additional investors returned to the Italian market, what did Long-Term do?
9. How would a loan from a major bank help the partners at Long-Term make money?
10. Why are hedge funds considered low risk?
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This section contains 526 words (approx. 2 pages at 300 words per page) |
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