What did LTCM specialize in?
Real estate
Highly leveraged hedge funds
Cryptocurrency
Insurance
Answer
LTCM specialized in highly leveraged hedge funds, which involved borrowing large sums of money to invest in financial instruments. This strategy allowed them to amplify their returns, but also increased their risk exposure. LTCM's downfall occurred when the Russian debt crisis and other market events caused a sharp decline in the value of their investments, leading to massive losses and a subsequent bailout by a consortium of banks.
Mastering Merton: A Deep Dive into the Legacy of Robert C. Merton
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