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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 5, The Cloister at Wilshire and Rodeo.

Multiple Choice Questions

1. To troubled businesses, what was Drexel's unregistered exchange offer?
(a) creating additional Chinese paper
(b) lowering their interest rates to businesses
(c) a way of using stocks or bonds to meet the interest obligations
(d) trading under the table

2. By 1981, what was Drexel responsible for?
(a) almost all of the junk bonds in the market
(b) engineering most of the hostile takeovers
(c) leading the field in high interest bonds
(d) moving Wall Street to Los Angeles

3. Why was Drexel Burnham's investment banking business diminished by 1975?
(a) Most of the major customers had fled.
(b) It had nothing to sell.
(c) Bond prices had risen too high.
(d) The bigger firms were copying its business model.

4. Where did Milken want to move his bond operation unit in 1978?
(a) Las Cruces
(b) Los Angeles
(c) Las Vegas
(d) Los Alamos

5. What was it about Milken that impressed his clients?
(a) his willingness to bargain when he sold them junk bonds
(b) his connections with politicians and movie stars
(c) his inside information about the junk bond companies
(d) his knowledge and memory for details about every bond there was.

Short Answer Questions

1. What was Fred Joseph's strategy for hiring employees for Drexel?

2. What kind of business did Milken's Belvedere Securities do?

3. What did Milken offer this market segment?

4. Why did Drexel remain a privately-held company?

5. With whom was the firm of Drexel Burnham Lambert identified by the late 1970s?

(see the answer key)

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