What caused the downturn, and eventual dissolution, of Long-Term Capital Management LP.? O The 1997 Russian default caused a significant rise in U.S. Treasury Bonds, which LTCM was significantly short selling. O With the fall of the Soviet Union, Russia invested in the U.S. markets and destabilized the economy temporarily. O LTCM did not investments in Russian markets when they defaulted on their debts. O LTCM was lying to investors in an effort to inflate their stocks, which they then used to pay their employees in

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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What caused the downturn, and eventual dissolution, of Long-Term Capital Management LP.?
The 1997 Russian default caused a significant rise in U.S. Treasury Bonds, which LTCM was significantly short
selling.
O With the fall of the Soviet Union, Russia invested in the U.S. markets and destabilized the economy
temporarily.
O LTCM did not investments in Russian markets when they defaulted on their debts.
OLTCM was lying to investors in an effort to inflate their stocks, which they then used to pay their employees in
stock options.
Transcribed Image Text:What caused the downturn, and eventual dissolution, of Long-Term Capital Management LP.? The 1997 Russian default caused a significant rise in U.S. Treasury Bonds, which LTCM was significantly short selling. O With the fall of the Soviet Union, Russia invested in the U.S. markets and destabilized the economy temporarily. O LTCM did not investments in Russian markets when they defaulted on their debts. OLTCM was lying to investors in an effort to inflate their stocks, which they then used to pay their employees in stock options.
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