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

Multiple Choice Questions

1. Who suspended arbitrage operations in April 1998?
(a) Salomon.
(b) Chase.
(c) Goldman Sachs.
(d) Fidelity Bank and Trust.

2. How much did the accounts for investors increase in 1994?
(a) 50%.
(b) 20%.
(c) 5%.
(d) 10%.

3. In 1996, the first bank Long-Term approached regarding credit deemed Long-Term as what?
(a) Greedy.
(b) Brilliant.
(c) A great investment.
(d) Too risky.

4. What percentage of Americans had no knowledge of Long-Term?
(a) 99%.
(b) 75%.
(c) 50%.
(d) 10%.

5. How much did Long-Term earn in its first year of operation?
(a) 5%.
(b) 10%.
(c) 75%.
(d) 28%.

Short Answer Questions

1. Where was the Long-Term Capital Portfolio stored?

2. What did Long-Term want to do for investors?

3. What did Black and Scholes think price changes were?

4. How much did Long-Term plan to take from its profits?

5. How long did Long-Term expect their investors to commit?

(see the answer key)

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