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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 Black and Scholes use to calculate market change?

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

3. In 1994, why did the yield raise on the thirty year Treasury bond?

4. In 1994, what market did Long-Term begin to express an interest in?

5. What did the traders accept about the financial models they used?

Short Essay Questions

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

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

3. What are relative value trades?

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

5. What did the Black-Scholes model help Long-Term to predict?

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

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

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

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

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

Write a brief essay supporting or refuting the following statement, citing examples from the text: Long-Term took part in risky investments as the market became over-saturated.

Essay Topic 2

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.

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)

This section contains 512 words (approx. 2 pages at 300 words per page) View a FREE sample