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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. What type of strategy did Long-Term employ?

2. What were popular pools in 1993?

3. What was Meriwether's team allowed to do, following the Treasury bill deal?

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

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

Short Essay Questions

1. In 1996, which significant companies did Long-Term surpass in terms of assets?

2. Why was Meriwether made a partner at Salomon?

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

4. Why are hedge funds considered low risk?

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

6. Although Long-Term was performing so well by 1996, how many Americans knew of the fund's existence?

7. Why was it difficult to know the exact amount of assets Long-Term held?

8. By the time Long-Term had been in business for two years, how did it compare to other old Wall Street companies?

9. What was Long-Term's objective in seeking out a bank to finance their credit?

10. Why were convergence trades the safest trades made by Long-Term?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Examine one of the following forms of investment vehicles:

- Hedge funds.

- Value funds.

- Bonds.

Answering the follow questions:

- What are the principals of this form of investment?

- What was Meriwether's experience with this form of investment?

- To what extent did the general public participate in this form of investment?

Essay Topic 2

Meriwether enjoyed building strong teams to work with. Write a brief essay examining the qualities he sought out in his team members.

Essay Topic 3

Write a brief essay supporting or refuting the following statement, citing examples from the text: Meriwether fully expected to continue making substantial returns with Long-Term's investment model.

(see the answer keys)

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