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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 did Long-Term risk losing if they allowed their assets to fall below five hundred million dollars?

2. What was the common belief regarding nuclear powers?

3. What was the result for some banks due to their involvement in the derivatives market?

4. On what date did Russia declare a debt moratorium?

5. What was Long-Term's signature trade based on?

Short Essay Questions

1. What move did Salomon make that surprised Long-Term?

2. During the financial crisis in 1998, where were the partners finding money?

3. In terms of the spreads in 1998, what was the difference between what Long-Term expected them to do and what they actually did?

4. Who was Jon Corzine?

5. Since Long-Term expected stock prices would fall, what did they sell insurance against?

6. What did the Fed determine would happen if Long-Term failed?

7. What was the risk to the market if Long-Term unraveled?

8. What strategy led to Long-Term's downfall during the Russian financial crisis?

9. Following the crisis in Russia, what position did investors take that adversely affected Long-Term?

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

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

Write a brief essay supporting or refuting the following statement, citing examples from the text: Long-Term set out to be a low risk company and exemplified that mission for several years.

Essay Topic 3

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?

(see the answer keys)

This section contains 513 words (approx. 2 pages at 300 words per page) View a FREE sample