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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. In the mid-1990's, what was the ratio of leverage on Wall Street?

2. What was the leverage of Long-Term, following its meeting with the Fed?

3. In 1998, what act led Long-Term to a fall?

4. What companies were selling bonds for Russia?

5. During the turmoil of 1998, investors avoided Long-Term because they were trying to avoid what?

Short Essay Questions

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

2. What contributes to the estimation of market volatility?

3. In spite of the economic crisis in Russia, what did Meriwether believe about Long-Term's trades?

4. What did Standard & Poor downgrade that would affect Long-Term significantly?

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

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

7. What was the goal of the Federal Reserve when it was created?

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

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

10. By the end of August 1998, what did the movement in the bond market look like?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

The academic model Long-Term used for investing proved impressive on many occasions.

1) What were the principles behind the Value-at-Risk models?

2) What were the problems with these models?

3) How did these models impact the investments placed by Long-Term?

Essay Topic 2

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.

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?

(see the answer keys)

This section contains 511 words (approx. 2 pages at 300 words per page) View a FREE sample