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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 14, Sovereign Privileges.

Multiple Choice Questions

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

2. Why were Milken's imitators not as successful as he was?
(a) They could not invest as much firm money.
(b) They could not raise the money Milken could or with the same speed.
(c) They had no idea how he was doing his business.
(d) They were bound by deeper government regulations.

3. What was Ichan able to do after he got a seat on the board of Tappan?
(a) He took over running the company.
(b) He maneuvered the sale of the company to AB Electrolux.
(c) He prevented the company from being taken over.
(d) He was able to raise the stock prices.

4. What does FIFI stand for?
(a) Fund Income from Favored Investors
(b) Five Investment Features Initiative
(c) First Investors Fund for Income
(d) Field Investment File Information

5. What was Drexel able to do that made it so successful?
(a) to avoid reporting many of the transactions
(b) to hear about acquisitions before anyone else
(c) to place the unsecured debt that banks wouldn't touch
(d) to get around banking laws

Short Answer Questions

1. What did Milken demand from everyone around him?

2. Where did Grant point out most of the junk bonds were held?

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

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

5. Why did Milken's people say they performed so well?

(see the answer key)

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