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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

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

2. What did the Black-Scholes model believe was constant?

3. How was Meriwether's career affected following the Treasury bill deal?

4. What did Long-Term do when IOs started to fall?

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

Short Essay Questions

1. Why was Meriwether made a partner at Salomon?

2. Why did Meriwether increase his position on Treasury Bill futures in spite of the market fluctuation?

3. What methods did Black and Scholes use to predict the changes that would take place in the market?

4. By the time Long-Term had been in business for two years, how did it compare to other old Wall Street companies?

5. Why did Meriwether begin recruiting employees he had worked with at the Arbitrage Group?

6. What dictates whether or interest only securities rise or fall?

7. What surprise happened when Meriwether was trading Treasury Bill futures?

8. In 1996, which significant companies did Long-Term surpass in terms of assets?

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

10. What did the Black-Scholes model help Long-Term to predict?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Those involved at the top levels of Long-Term were given respect, money and opportunity. Write a brief essay analyzing some of the advantages a career at Long-Term gave many of the partners, citing examples from the text.

Essay Topic 2

Meriwether began his career at Salomon Brothers before starting Long-Term. Write a detailed profile of his career path at Salomon Brothers, answering the following questions.

1) What risk did Meriwether take at Salomon Brothers?

2) What were the challenges and rewards?

3) Why did his career at Salomon Brothers come to an end?

Essay Topic 3

Meriwether enjoyed building strong teams to work with. Write a brief essay examining the qualities he sought out in his team members.

(see the answer keys)

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