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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 10, 'Drexel is like a God'.

Multiple Choice Questions

1. When inflation raised the value of assets but not stock prices, what was the result?
(a) Junk bonds became less useful in building wealth.
(b) People stopped buying stocks and company values soared.
(c) It was cheaper to buy a company than to start out from scratch.
(d) People began selling their stocks to start new businesses.

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

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

4. By 1981, what was Drexel responsible for?
(a) almost all of the junk bonds in the market
(b) leading the field in high interest bonds
(c) moving Wall Street to Los Angeles
(d) engineering most of the hostile takeovers

5. What government regulation made it easier for multiple mergers in the 1980s?
(a) a relaxation of antitrust restrictions
(b) gauranteed loans for mergers
(c) deregulation of banks
(d) cuts in the minimum wage

Short Answer Questions

1. How was Drexel being spoken of after the success of so many hostile takeovers?

2. For whom did Milken do trading?

3. What was the result in 1974 when International Nickel Company raided ESB?

4. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?

5. Why was Milken so interested in low grade bonds?

(see the answer key)

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