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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 regulation did Long-Term bypass when trading equities?

2. How many banks stepped forward to help bail out Long-Term?

3. When Long-Term met with the Fed, it was obvious they did not have enough money to make it through what?

4. What was the dollar amount of the premium Long-Term paid for its loan?

5. What are some of the new markets Long-Term looked into in 1997?

Short Essay Questions

1. How much of Long-Term did the Union Bank of Switzerland buy on a hedge?

2. What was the Fed's response to Long-Term's exposure?

3. Following the financial crisis in Russia, what did the partners do to begin raising money?

4. What did Long-Term do when they expected stock prices to fall?

5. What was the financial climate when Merton and Scholes were awarded the Nobel Prize?

6. Why did banks and investment banks get involved in the derivatives market?

7. Why did the issue in Russia cost Long-Term money on an initial basis?

8. During the financial crisis in 1998, where were the partners finding money?

9. Who was Jon Corzine?

10. In 1997, what was Meriwether encouraging his employees to do?

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 set out to be a low risk company and exemplified that mission for several years.

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

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.

(see the answer keys)

This section contains 446 words (approx. 2 pages at 300 words per page) View a FREE sample