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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 3, Transformation.

Multiple Choice Questions

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

2. Why did Milken take the bus from New Jersey to Wall Street?
(a) to avoid talking to Wall Street people
(b) because he liked the people on the bus
(c) because he did not drive a car
(d) because he could not afford the train

3. Why was Milken so interested in low grade bonds?
(a) he liked to gamble big time
(b) they were the only ones he really understood
(c) that was all he could afford
(d) equity offerings were not an option for the Drexel Burnham market

4. What are REITs?
(a) rare employee investment tallies
(b) real estate instruments like mortgages
(c) raw energy investment tables
(d) really extended investment trials

5. What became the name of bonds that come into being during highly leveraged takeovers?
(a) Paper trails
(b) Chinese paper
(c) Tickertape
(d) Hot paper

Short Answer Questions

1. When he heard on the radio about a change in options to buy stocks, what did Milken do that saved Drexel Burnham Lambert?

2. How did Milken break into the Las Vegas gambling business community?

3. Why did Drexel Burnham Lambert agree to let Milken move his operation at a cost of millions of dollars?

4. Who dominated the market in junk bond funds from 1978 on?

5. Where did Milken want to move his bond operation unit in 1978?

(see the answer key)

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