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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 did the letter Meriwether sent to his clients claim it was difficult to do with Long-Term?

2. How much did banks and investors make in conjunction with Long-Term?

3. Where was the London office for Long-Term located?

4. In 1996, how much did Long-Term have in assets?

5. What notable invention changed the face of trading in the 1970's?

Short Essay Questions

1. What was Meriwether's group at Salomon given the authority to do?

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

3. Why did Meriwether begin recruiting employees he had worked with at the Arbitrage Group?

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

5. Why are hedge funds considered low risk?

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

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

8. What did Long-Term do to limit risk in bond trading?

9. What methods did Black and Scholes use to predict the changes that would take place in the market?

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

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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.

Essay Topic 2

Write a brief essay supporting or refuting the following statement, citing examples from the text: The irresponsible management of Long-Term by the partners led to its downfall.

Essay Topic 3

Those involved at the top levels of Long-Term were given respect, money and opportunity. Write a brief essay analyzing some of the advantages a career at Long-Term gave many of the partners, citing examples from the text.

(see the answer keys)

This section contains 556 words (approx. 2 pages at 300 words per page) View a FREE sample