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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. What was the purpose of Fred Joseph's meeting at the Barbizon Plaza in New York?
(a) to undermine Milken and take over control of the Department
(b) consideration of all ideas, even the far-out and the flamboyant, instead of the conservative
(c) gathering inside information to take back to Los Angeles
(d) pirating talent from some of the biggest firms on Wall Street

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 could not afford the train
(d) because he did not drive a car

3. What did Milken and Joseph devise to keep business flowing during the recession?
(a) finance services for the largest clients
(b) better communications with clients
(c) different kinds of instruments
(d) ways of trading abroad

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

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

Short Answer Questions

1. What was the Milken philosophy?

2. What became the name of bonds that come into being during highly leveraged takeovers?

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. By 1981, what was Drexel responsible for?

(see the answer key)

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