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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 4, Merge with Mike.

Multiple Choice Questions

1. Where did Milken and his wife buy a house?
(a) Encino
(b) San Clemente
(c) Santa Monica
(d) Beverley Hills

2. What was Milken's goal by the early 1970s?
(a) He wanted to move into high-yield bonds.
(b) He wanted low-yield bonds to be its own specialty.
(c) He wanted to have his own firm.
(d) He wanted to own Drexel Burnham.

3. What did Milken offer this market segment?
(a) a new kind of debt instrument
(b) a hope for recovery
(c) a protection from takeover
(d) ten cents on the dollar

4. What was Milken's biggest contribution to Drexel in the early years?
(a) engineering the change over to computers
(b) a study of the securities delivery system which cut the delivery time from five days to one
(c) a recruiting system to get the brightest Ivy League graduates
(d) an entry into the social circles of high-yield bond traders

5. What was Fred Joseph's strategy for hiring employees for Drexel?
(a) overhiring to learn which are the ones to keep
(b) hiring from the smaller firms so that they saw it as a step up
(c) getting recommendations from bigger firms
(d) paying higher commissions than anyone else

Short Answer Questions

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

2. What did Milken's involvement in this business do for him personally?

3. Why did the new Drexel Burnham company give Milken a $2 million position?

4. What are REITs?

5. Why did Drexel have to separate from J. P. Morgan?

(see the answer key)

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