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

Multiple Choice Questions

1. When Meriwether increased his position in Treasury futures, what did he expect the market to do?
(a) Drop substantially.
(b) Collapse.
(c) Perform typically.
(d) Rise sharply overnight.

2. Who was withdrawing from the hedge fund markets?
(a) Foreign countries.
(b) Large investment firms.
(c) Small investment firms.
(d) Long-Term.

3. In 1996, how much did Long-Term have in assets?
(a) $140 billion.
(b) $1 billion.
(c) $120 million.
(d) $500 million.

4. When did the Russian market begin to fail?
(a) September 1998.
(b) April 1998.
(c) August 1998.
(d) May 1998.

5. What is the method of paying a percentage of a bond called?
(a) A trim.
(b) A bond fee.
(c) A percentage price.
(d) A haircut.

Short Answer Questions

1. What was the typical scenario for bond investors in 1994?

2. Who typically invested in hedge funds?

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

4. In 1996, what was the response of most of the banks in terms of offering credit financing to Long-Term?

5. How did regulators respond to the involvement of banks in the derivatives market?

(see the answer key)

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