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This quiz consists of 5 multiple choice and 5 short answer questions through The Human Factor.

Multiple Choice Questions

1. What did Long-Term do when IOs started to fall?
(a) Buy them up.
(b) Explain the situation to investors.
(c) Lie to investors.
(d) Sell their shares.

2. What was the result for some banks due to their involvement in the derivatives market?
(a) They made billions.
(b) They went bankrupt.
(c) They were nationally recognized.
(d) They were prosecuted.

3. In August 1998, how far down was Long-Term for the month?
(a) 25%.
(b) 10%.
(c) 44%.
(d) 60%.

4. How much equity did Long-Term have hold of in 1997?
(a) $1 billion.
(b) $0.
(c) $5 billion.
(d) $100 million.

5. How did regulators respond to the involvement of banks in the derivatives market?
(a) They were delighted.
(b) They were worried.
(c) There were not concerned.
(d) They encouraged it.

Short Answer Questions

1. What put pressure on the currency in Brazil?

2. Michael Steindardt believed what was the "culprit in 1994"?

3. What level of risk did Long-Term offer?

4. Who was the Fed Chairman in 1997?

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

(see the answer key)

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