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This quiz consists of 5 multiple choice and 5 short answer questions through Tug-of-War.

Multiple Choice Questions

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

2. Where did Meriwether work in 1979?
(a) Merrill Lynch.
(b) Long-Term.
(c) Salomon Brothers.
(d) Lehman.

3. Once in business, what did Long-Term have an easy time getting from banks?
(a) Personal information.
(b) Workers.
(c) Money.
(d) Endorsements.

4. What was the end result of Meriwether's Treasury bill deal?
(a) It frightened his colleagues.
(b) It lost a lot of money.
(c) It made a lot of money.
(d) It was not a notable deal.

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

Short Answer Questions

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

2. What was J.F. Eckstein & Co. primarily working on in 1979?

3. Where was Robert C. Merton working when Meriwether hired him?

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

5. What is the method of paying a percentage of a bond called?

(see the answer key)

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