View a FREE sample

This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. By the end of August 1998, what market had practically stopped trading altogether?
(a) Stock markets.
(b) International markets.
(c) Bond markets.
(d) Gold markets.

2. When the financial market in Russia collapsed, what were many in the market attempting to do?
(a) Release losing positions.
(b) Leave the country.
(c) Acquire losing positions.
(d) Invest in Italy.

3. In August 1998, how far down was Long-Term for the year-to-date?
(a) 52%.
(b) 10%.
(c) 2%.
(d) 35%.

4. When Russia began to default on its loans, what did people start doing with their high risk bonds?
(a) Trading.
(b) Holding.
(c) Selling.
(d) Buying.

5. After the Russian financial crisis, what caused further fluctuations in the market?
(a) Interest from the IRS.
(b) Interest from big oil.
(c) Small time investors.
(d) Panicked investors.

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

7. After the meeting with the Fed, a market movement of what percentage could have ended Long-Term?
(a) 25%.
(b) 10%.
(c) 1%.
(d) 30%.

8. In 1996, what was Meriwether encouraging Long-Term to do?
(a) Stick with the tried and true.
(b) Hire new employees.
(c) Break the law.
(d) Investigate new territory.

9. What was the first horrible month Long-Term had?
(a) June, 1998.
(b) It never had a horrible month.
(c) August, 1998.
(d) July, 1998.

10. How much money did Chase loan Long-Term so that they could continue to clear trades?
(a) $5 million.
(b) $10 million.
(c) $752 million.
(d) $475 million.

11. Once the financial market in Russia collapsed, what did people stop trading?
(a) Commodities.
(b) Bonds.
(c) Corn.
(d) Stocks.

12. In 1998, what market did Long-Term bet would decline?
(a) The Asian market.
(b) The U.S. market.
(c) The Russian market.
(d) The Latin market.

13. When Long-Term met with the Fed, it was obvious they did not have enough money to make it through what?
(a) The following week.
(b) The fall of China.
(c) A debt call from Russia.
(d) Another big hit.

14. In August 1998, how far down was Long-Term for the month?
(a) 10%.
(b) 60%.
(c) 44%.
(d) 25%.

15. What was the leverage of Long-Term, following its meeting with the Fed?
(a) 10-1.
(b) 50-1.
(c) 100-1.
(d) 25-1.

Short Answer Questions

1. What put pressure on the currency in Brazil?

2. Where did the private contracts Long-Term made in 1998 trade?

3. Who was the Fed Chairman in 1997?

4. When did the Russian market begin to fail?

5. What did the incident on August 21 cost Long-Term?

(see the answer keys)

This section contains 375 words (approx. 2 pages at 300 words per page) View a FREE sample