View a FREE sample

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

Multiple Choice Questions

1. What did the Black-Scholes model believe was constant?
(a) Meriwether's enthusiasm.
(b) Volatility.
(c) Growth.
(d) Income.

2. What did Meriwether warn his investors against in 1994?
(a) His early retirement.
(b) A repeat performance.
(c) Not investing enough with Long-Term.
(d) Further growth.

3. What did the traders accept about the financial models they used?
(a) They were imperfect.
(b) They were expensive.
(c) They removed the element of surprise.
(d) They were smarter than humans.

4. What type of strategy did Long-Term employ?
(a) Low risk.
(b) Moderate risk.
(c) High risk.
(d) Whatever was dictated by the market.

5. Where was Robert C. Merton working when Meriwether hired him?
(a) The Federal Exchange Commission.
(b) Harvard.
(c) NASA.
(d) Wall Street.

Short Answer Questions

1. What type of government paper was bought in Italy?

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

3. Who developed the Black-Scholes model?

4. How much did Long-Term earn in its first year of operation?

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

(see the answer key)

This section contains 167 words (approx. 1 page at 300 words per page) View a FREE sample