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

2. Who dominated the market in junk bond funds from 1978 on?
(a) Drexel
(b) Lehman Brothers
(c) Morgan Investments
(d) Fidelity

3. What advantage did Milken's kind of debt offer?
(a) It was separate from bank loans and the bondholder could sell his bonds whenever he wanted
(b) It was easier to use than getting a bank loan.
(c) It did not tie up cash the way loan repayments did.
(d) It was done under the table so the banks did not know about it.

4. What was Milken's problem with back office people at Drexel?
(a) He did not work well with Jewish people.
(b) He could not communicate with them.
(c) He was less educated than they were.
(d) He did not understand their work.

5. Why did the new Drexel Burnham company give Milken a $2 million position?
(a) Milken was thinking of leaving.
(b) Milken ochestrated the merger of Drexel and Burnham.
(c) Milken hid evidence from the SEC.
(d) Milken would be the token Jew.

Short Answer Questions

1. What was the address of the new building in L. A.?

2. What does FIFI stand for?

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

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

5. Who becomes Milken's ally and public face in 1974?

(see the answer key)

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