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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. What was the internal climate at Long-Term in 1998?

2. In August 1998, how far down was Long-Term for the month?

3. When did the Russian market begin to fail?

4. When the financial market in Russia collapsed, what were many in the market attempting to do?

5. In 1998, what were many hedge funds selling insurance against?

Short Essay Questions

1. Why did banks and investment banks get involved in the derivatives market?

2. How much of Long-Term did the Union Bank of Switzerland buy on a hedge?

3. Why did the issue in Russia cost Long-Term money on an initial basis?

4. Who was Jon Corzine?

5. When did huge losses begin for Long-Term and why?

6. What contributes to the estimation of market volatility?

7. What did Long-Term do when they expected stock prices to fall?

8. What was the goal of the Federal Reserve when it was created?

9. Why were regulators concerned about the volume of banks and investment banks involved in the derivatives market?

10. What did Standard & Poor downgrade that would affect Long-Term significantly?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Examine one of the following forms of investment vehicles:

- Hedge funds.

- Value funds.

- Bonds.

Answering the follow questions:

- What are the principals of this form of investment?

- What was Meriwether's experience with this form of investment?

- To what extent did the general public participate in this form of investment?

Essay Topic 2

The international market provided Long-Term with a substantial opportunity for success. Write an essay examining Long-Term's initial involvement in the international market and the results of this investment.

Essay Topic 3

When Meriwether set up Long-Term, he had to take many steps to create the company. Write an essay examining the process Meriwether went through to create Long-Term.

(see the answer keys)

This section contains 490 words (approx. 2 pages at 300 words per page) View a FREE sample