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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. Who helped Meriwether raise money for Long-Term?

2. In 1996, what was Long-Term seeking from the bank that would handle their credit?

3. Where was David W. Mullins working when Meriwether hired him?

4. What did banks and investors want from Long-Term?

5. In 1996, the first bank Long-Term approached regarding credit deemed Long-Term as what?

Short Essay Questions

1. What surprise happened when Meriwether was trading Treasury Bill futures?

2. Why did bonds lose their value in the 1970's?

3. What was Meriwether's business model for Long-Term?

4. On what did Long-Term base the claim that it was difficult to lose money with them?

5. Why was Meriwether made a partner at Salomon?

6. Why did Black and Scholes believe that price changes were random?

7. When Meriwether was building his team at the Arbitrage Group, what qualities did he look for?

8. What were the legal limits on hedge fund investors?

9. When additional investors returned to the Italian market, what did Long-Term do?

10. What are relative value trades?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

The academic model Long-Term used for investing proved impressive on many occasions.

1) What were the principles behind the Value-at-Risk models?

2) What were the problems with these models?

3) How did these models impact the investments placed by Long-Term?

Essay Topic 2

The international market provided Long-Term with a substantial opportunity for success. Write an essay examining Long-Term's initial involvement in the international market and the results of this investment.

Essay Topic 3

The Fed has a major voice in the financial decisions in the United States. Examine the function of the Fed and the actions that it took that inadvertently played a part in Long-Term's success.

(see the answer keys)

This section contains 491 words (approx. 2 pages at 300 words per page) View a FREE sample