A.The consortium wanted to keep this out of the regulators' eyes

B.Many of the banks in the rescue consortium were among LTCM's counterparties

C.Untimely unwinding of some LTCM positions would lead to large market fluctuations and possible turmoil

D.Some of the banks in the rescue consortium were LTCM investors

A.The initial price of the underlying being higher than the final price

B.Realized losses on short-term contracts against unrealized gains on the long-run contract

C.The short-term price of the underlying being higher than the long-run contract

D.The final price of the underlying being higher than the initial price

A.Catastrophic losses in its own credit card division

B.The general downturn in the economy of the US

C.By lowering its own credit underwriting standards

D.Acquisitions like Long Beach and Providian

A.Been used if senior management had ever seen it

B.Alerted senior management to the problems before the major losses occurred

C.Not correctly assessed the risk in Nick Leeson's option trades as they have non-linear price characteristics

D.Helped very little as Nick Leeson hid many trades

A.Create credit risk only for the buyer (due to default by the seller) provided the premium is due, and paid, at contract initiation

B.Usually create credit risk only for the seller (to default by the buyer)

C.Create no credit risk, since the buyer need not exercise the option

D.Always generate credit risk to both counterparties