Geography of Montserrat Geography of Montserrat Montserrat is an island in the Caribbean Sea, in the Leeward Islands. Its nearest neighbours in the island chain include Guadeloupe to the south-east, Antigua to the north-east and Nevis to the north-west. The island is 16 km (9.9 mi) long and 11 km (6.8 mi) wide, with a coastline of about 40 km. The island is volcanic and largely mountainous. The Soufrière Hills volcano became active in 1995, causing widespread devastation, including the destruction of the capital and formerly largest settlement on the island, Plymouth. The southern part of the island is now uninhabitable and human
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