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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 5, The Cloister at Wilshire and Rodeo.

Multiple Choice Questions

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

2. Where did Milken want to move his bond operation unit in 1978?
(a) Las Cruces
(b) Los Angeles
(c) Las Vegas
(d) Los Alamos

3. How did Milken and his wife travel to Los Angeles?
(a) by train
(b) by car
(c) by bus
(d) by private jet

4. What was the result of changes in the investment banking industry in the 1970s?
(a) Firms became highly competitive and business moved around.
(b) Regulations now made it harder to trade in junk bonds.
(c) Many new firms came into existence and were soon taken over.
(d) Business concentrated in New York and Los Angeles.

5. By 1986, who was the largest stockholder in Drexel Burnham Lambert?
(a) Michael Milken
(b) Grace Milken
(c) the Milken Family Trust
(d) Lowell Milken

Short Answer Questions

1. Why did the stripped bonds result in large tax benefits?

2. What advantage did Milken's kind of debt offer?

3. What are REITs?

4. What was the Milken philosophy?

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

(see the answer key)

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