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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 6, The Air Fund.

Multiple Choice Questions

1. Why did the stripped bonds result in large tax benefits?
(a) no law covered the stripped Treasury security
(b) those sales did not have to be reported as income
(c) without the coupons the securities were untraceable
(d) stripping the securities left them worthless

2. What benefit did Milken arrange for his low grade investment group for the next 14 years?
(a) half the profits
(b) extensive paid vacations
(c) higher salaries and larger offices
(d) 35% of the profits

3. What did the Federal Home Loan Bank Board discover about what Spiegle at Columbia Savings and Loan was doing?
(a) using Columbia Savings and Loan money to finance his own investments
(b) making fictitious home loans
(c) financing his junk bond purchases with federally insured funds
(d) manipulating his competitors out of business

4. What did the Milken Group do in 1983?
(a) began making large charitable contributions
(b) started buying up real estate in Los Angeles
(c) moved from Century City to a building at Wilshire Boulevard and Rodeo Drive
(d) cancel the annual Preditors' Ball

5. What commission did Drexel make on these funds?
(a) seven eighths of a percent
(b) three quarters of a percent
(c) five eighths of a percent
(d) one percent

Short Answer Questions

1. What was the advantage FIFI and other like funds offer?

2. What was Milken's goal by the early 1970s?

3. What was the purpose of Fred Joseph's meeting at the Barbizon Plaza in New York?

4. What does FIFI stand for?

5. What influenced Milken to become interested in low grade bond portfolios?

(see the answer key)

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