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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. In 1998, who published Meriwether's letter to his clients?
(a) Bloomberg.
(b) The Financial Times.
(c) The New York Times.
(d) The New Yorker.

2. In the mid-1990's, what was the ratio of leverage on Wall Street?
(a) 45-1.
(b) 10-1.
(c) 25-1.
(d) 100-1.

3. The purpose of the Federal Reserve System was to promote what?
(a) Morality.
(b) Local investments.
(c) Stability.
(d) Honest investments.

4. What was the common belief regarding nuclear powers?
(a) They never default.
(b) They do not have capital.
(c) They always default.
(d) They are not stable.

5. What are some of the new markets Long-Term looked into in 1997?
(a) Stocks.
(b) All of these.
(c) Paired-shares.
(d) Equities.

Short Answer Questions

1. When the Fed visited Long-Term, what did Hilibrand show them?

2. In 1997, who awarded Long-Term the loan warrant it had requested?

3. What did Long-Term risk losing if they allowed their assets to fall below five hundred million dollars?

4. What companies were selling bonds for Russia?

5. What did Long-Term avoid by working with derivatives instead of stocks?

Short Essay Questions

1. Since Long-Term expected stock prices would fall, what did they sell insurance against?

2. What was the goal of the Federal Reserve when it was created?

3. What did Long-Term do when they expected stock prices to fall?

4. Following the crisis in Russia, what position did investors take that adversely affected Long-Term?

5. Following the financial crisis in Russia, what did the partners do to begin raising money?

6. What was the risk to the market if Long-Term unraveled?

7. What move did Salomon make that surprised Long-Term?

8. Who warned Long-Term about making trades that counted on falling stock prices?

9. During the financial crisis in 1998, where were the partners finding money?

10. What was the Fed's response to Long-Term's exposure?

(see the answer keys)

This section contains 470 words (approx. 2 pages at 300 words per page) View a FREE sample