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This quiz consists of 5 multiple choice and 5 short answer questions through Bank of Volatility.

Multiple Choice Questions

1. What determines the swap rate in a country?
(a) Interest rates on the real estate market.
(b) The price of corn.
(c) Interest rates on government debt.
(d) The price of oil.

2. In 1998, what type of contracts did Long-Term make with private entities?
(a) Long-term.
(b) Illegal.
(c) Liquid.
(d) Short-term.

3. What did Long-Term do with off-the-run bonds?
(a) Hold them for profit.
(b) Unload them quickly.
(c) Loan them to other firms.
(d) Avoid them.

4. In 1994, why did the price of bonds drop?
(a) The Fed raised interest rates.
(b) There was too much wealth in America.
(c) The Fed lowered interest rates.
(d) Property value went down.

5. In 1998, what market did Long-Term bet would decline?
(a) The Latin market.
(b) The Russian market.
(c) The Asian market.
(d) The U.S. market.

Short Answer Questions

1. At what level was the swap rate of the United States in April 1998?

2. What companies were selling bonds for Russia?

3. In 1998, Long-Term expected prices to do what?

4. In 1996, what was the second bank Long-Term approached about financing their credit?

5. In 1994, why did the yield raise on the thirty year Treasury bond?

(see the answer key)

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