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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 was practically impossible to determine about Long-Term?

2. In order for Meriwether's Treasury futures investment to work, what did he need market prices to do?

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

4. Why did Long-Term trade in Italy?

5. Who developed the Black-Scholes model?

Short Essay Questions

1. Why did Meriwether increase his position on Treasury Bill futures in spite of the market fluctuation?

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

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

4. Why was Meriwether made a partner at Salomon?

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

6. When investing in Italy, what did Long-Term avoid telling their customers?

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

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

9. When did Meriwether begin making sales calls for Long-Term?

10. How would a loan from a major bank help the partners at Long-Term make money?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

The investment requirements of Long-Term were quite stringent. Citing examples from the text, write an essay examining the investment requirements and opportunity for return for potential Long-Term investors.

Essay Topic 2

Occasionally, Long-Term encountered a trading regulation that was designed to prevent them from over-leveraging. In many of these situations, they would find a way to sidestep the regulation. Write an essay that takes a stand on this type of behavior and identify at least three examples from the text in your work.

Essay Topic 3

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.

(see the answer keys)

This section contains 563 words (approx. 2 pages at 300 words per page) View a FREE sample