25. Which one of the following is not true about Long-Term Capital Management L.P. (LTCM)?

A One of LTCMs first trades involved the same thirty-year Treasury bond.

B Treasurys (of all durations) are issued by the U.S. government to fi- nance the federal budget. Six months or so after they are issued, the bonds become harder to trade.

C Off-the-run 30-year Treasury bond is more liquid and desirable.

D Off-the-run bond is traded at a slight discount.

E LTCM believed that many opportunities arose from market distortions created by the sometimes arbitrary demands of institutions.

26. Which one of the following is not the potential problem of LTCM? A. Negatively Skewed Distribution. B. Independently Distributed. C. Illiquidity

D. Extremely high leverage. E. Secret and opaque operations.