Long-Term Capital Management Made Rates of Return as High as 40

question 207

Multiple Choice

Long-Term Capital Management made rates of return as high as 40% by:

• A)buying oil from Canada and selling it to China.
• B)managing professional sports teams and being paid with a share of their profit.
• C)mining diamonds in Africa.
• D)using computer models to take advantage of small differences in asset prices in global financial markets.

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Definitions:

Depreciated

The method of distributing the expense of a physical asset across its lifespan, indicating its diminishing value as time passes.

Depletion

The allocation of the cost of natural resources over their useful life.

Mining Company

A company involved in the extraction of minerals, metals, or other geological materials from the earth.

Mineral Rights

Legal entitlements allowing the holder to explore, extract, and sell mineral resources from a piece of land.