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Name: _________________________ | Period: ___________________ |
This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.
Short Answer Questions
1. Once the financial market in Russia collapsed, what did people stop trading?
2. In 1998, what act led Long-Term to a fall?
3. What was the climate at Long-Term during the Russian financial crisis?
4. In 1998, what market did Long-Term bet would decline?
5. In August 1998, how far down was Long-Term for the year-to-date?
Short Essay Questions
1. Since Long-Term expected stock prices would fall, what did they sell insurance against?
2. By the end of August 1998, what did the movement in the bond market look like?
3. Why did the issue in Russia cost Long-Term money on an initial basis?
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. What was the Fed's response to Long-Term's exposure?
7. Following the financial crisis in Russia, what did the partners do to begin raising money?
8. What move did Salomon make that surprised Long-Term?
9. What contributes to the estimation of market volatility?
10. Why did banks and investment banks get involved in the derivatives market?
Essay Topics
Write an essay for ONE of the following topics:
Essay Topic 1
When Long-Term achieved major profits in its first year, Meriwether wrote a letter to investors warning against such a strong future performance.
1) Why did Meriwether feel it was important to communicate with his investors?
2) What warnings did Meriwether share with his investors?
3) Why did Meriwether feel it necessary to communicate at this level?
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
Meriwether began his career at Salomon Brothers before starting Long-Term. Write a detailed profile of his career path at Salomon Brothers, answering the following questions.
1) What risk did Meriwether take at Salomon Brothers?
2) What were the challenges and rewards?
3) Why did his career at Salomon Brothers come to an end?
This section contains 511 words (approx. 2 pages at 300 words per page) |
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