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This quiz consists of 5 multiple choice and 5 short answer questions through At the Fed.

Multiple Choice Questions

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

2. In 1998, Long-Term expected prices to do what?
(a) Rise.
(b) Stay the same.
(c) Fluctuate.
(d) Fall.

3. In 1997, who awarded Long-Term the loan warrant it had requested?
(a) Chase.
(b) The Cayman Islands Commons.
(c) Bank of America.
(d) Union Bank of Switzerland.

4. What did the letter Meriwether sent to his clients claim it was difficult to do with Long-Term?
(a) Take legal action.
(b) Make money.
(c) Get a job.
(d) Lose money.

5. What did the incident on August 21 cost Long-Term?
(a) $200 million.
(b) $1 billion.
(c) $2 billion.
(d) $150 million.

Short Answer Questions

1. What percentage of Americans had no knowledge of Long-Term?

2. What notable player was on vacation during the crisis in Russia?

3. How much of the face value of a bond do buyers typically pay?

4. What are some of the new markets Long-Term looked into in 1997?

5. In the 1970's, what type of trading was considered dull?

(see the answer key)

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