Montserrat of Montserrat is approximately east-southeast of Puerto Rico and southwest of Antigua. The island lies north-northwest of Suriname and French Guiana (France). It comprises and is gradually increasing owing to the buildup of volcanic deposits on the southeast coast. The island is long and wide, with rock cliffs rising above the sea and a number of smooth bottomed sandy beaches scattered among coves on the western (Caribbean) side of the island. Montserrat has two islets, Virgin and Statue Rock. In July 1995, Montserrat's Soufrière Hills volcano, dormant for centuries, erupted and soon buried the island's capital, Plymouth, in more than
Long-Term Capital Management invested in other derivatives such as equity options. Under prevailing US tax laws, there was a different treatment of long-term capital gains, which were taxed at 20.0 percent, and income, which was taxed at 39.6 percent. The earnings for partners in a hedge fund was taxed at the higher rate applying to income, and LTCM applied its financial engineering expertise to legally transform income into capital gains. It did so by engaging in a transaction with UBS (Union Bank of Switzerland) that would defer foreign interest income for seven years, thereby being able to earn the more favourable capital gains