View a FREE sample

This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. In the 1970's, what type of trading was considered dull?
(a) Gasoline.
(b) Securities.
(c) Corn.
(d) Bond.

2. Who became the temporary CEO of Meriwether's group when scandal hit?
(a) John Meriwether.
(b) Warren Buffet.
(c) Paul Mozer.
(d) J.F. Salomon.

3. What did Long-Term want to do for investors?
(a) Limit risk.
(b) All of these.
(c) Make money.
(d) Build trust.

4. How much of the face value of a bond do buyers typically pay?
(a) 10%.
(b) 1%.
(c) 15%.
(d) 25%.

5. What were the models Long-Term used unable to predict?
(a) Investor's exact return.
(b) Market collapse.
(c) All of these.
(d) Long-Term's exact income.

Short Answer Questions

1. In 1996, Long-Term had achieved thirty times its what?

2. What company was Kapor the founder of?

3. What did banks and investors want from Long-Term?

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

5. Why did Rosenfeld choose not to co-found Kapor's project?

Short Essay Questions

1. Why was Meriwether made a partner at Salomon?

2. Why were convergence trades the safest trades made by Long-Term?

3. When investing in Italy, what did Long-Term avoid telling their customers?

4. How would a loan from a major bank help the partners at Long-Term make money?

5. What did Long-Term do to limit risk in bond trading?

6. On what did Long-Term base the claim that it was difficult to lose money with them?

7. What was Long-Term's objective in seeking out a bank to finance their credit?

8. Why are hedge funds considered low risk?

9. How did Long-Term respond to firms that would not waive the fee for the haircut?

10. When did Meriwether begin making sales calls for Long-Term?

(see the answer keys)

This section contains 505 words (approx. 2 pages at 300 words per page) View a FREE sample