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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. In 1998, what market did Long-Term bet would decline?

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

3. How many banks stepped forward to help bail out Long-Term?

4. What are some of the new markets Long-Term looked into in 1997?

5. If the Long-Term fund failed, what would counter parties have to do?

Short Essay Questions

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

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

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

4. What was the financial climate when Merton and Scholes were awarded the Nobel Prize?

5. By the end of August 1998, what did the movement in the bond market look like?

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

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

8. Who was Jon Corzine?

9. In spite of the economic crisis in Russia, what did Meriwether believe about Long-Term's trades?

10. What was the Fed's response to Long-Term's exposure?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

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 2

The Fed has a major voice in the financial decisions in the United States. Examine the function of the Fed and the actions that it took that inadvertently played a part in Long-Term's success.

Essay Topic 3

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.

(see the answer keys)

This section contains 492 words (approx. 2 pages at 300 words per page) View a FREE sample