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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. To troubled businesses, what was Drexel's unregistered exchange offer?
(a) lowering their interest rates to businesses
(b) creating additional Chinese paper
(c) trading under the table
(d) a way of using stocks or bonds to meet the interest obligations

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

3. What did Milken's involvement in this business do for him personally?
(a) He was finally able to take the train.
(b) He married a movie star.
(c) He finally gained respect from Burnham.
(d) He became very wealthy.

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

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

Short Answer Questions

1. What was HITS?

2. How did the firm now have equity stakes in most of the companies that it financed?

3. What are REITs?

4. Why was Milken nervous about the large deals?

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

(see the answer key)

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