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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. Why did Drexel have to separate from J. P. Morgan?
(a) the enactments of the Glass-Steagall Act in 1934
(b) the final break up of J. P. Morgan and Company
(c) a disagreement between Drexel and Morgan
(d) the regulations of the sherman Anti-Trust Act

2. What did the Milken brothers do probably without notifying Drexel?
(a) investment partnerships that were to be registered with Bear Stearns
(b) buy into a number of smaller investment firms
(c) set up their own investment banking business
(d) underwrite bond issues in excess for $1 trillion

3. Why did Milken's people say they performed so well?
(a) because he would accept nothing less
(b) because they were maing so much money
(c) because they learned from the King
(d) because they had to get up so early

4. Why was Drexel Burnham's investment banking business diminished by 1975?
(a) Bond prices had risen too high.
(b) It had nothing to sell.
(c) The bigger firms were copying its business model.
(d) Most of the major customers had fled.

5. What was Milken's problem with back office people at Drexel?
(a) He did not understand their work.
(b) He did not work well with Jewish people.
(c) He was less educated than they were.
(d) He could not communicate with them.

Short Answer Questions

1. What was the Wall Street attitude toward low grade bonds at the time Milken started trading in them?

2. What was Milken's biggest contribution to Drexel in the early years?

3. Keeping New York office hours, at what time did they begin work in L. A.?

4. What commission did Drexel make on these funds?

5. What did Milken's involvement in this business do for him personally?

(see the answer key)

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