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

2. What was Drexel's only real competition by the 1980s?
(a) Lehman Brothers
(b) Merrill Lynch
(c) Morgan Stanley
(d) Barnes and Noble

3. Why did the stripped bonds result in large tax benefits?
(a) no law covered the stripped Treasury security
(b) stripping the securities left them worthless
(c) those sales did not have to be reported as income
(d) without the coupons the securities were untraceable

4. How did Milken break into the Las Vegas gambling business community?
(a) Milken lowered his commissions to get large casino business.
(b) Milken traveled every weekend to gamble in Las Vegas.
(c) Milken helped Steve Wynn raise the funds he needed to build in Atlantic City.
(d) Milken showed the casino owners how they could double their income.

5. What was the Milken philosophy?
(a) to go after businesses listed on the NYSE
(b) to go after businesses that were owner-managed
(c) to go after startup businesses
(d) to go after businesses that were sure to fail

Short Answer Questions

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

2. What does FIFI stand for?

3. Why did Milken take the bus from New Jersey to Wall Street?

4. Who becomes Milken's ally and public face in 1974?

5. Who moved to Los Angeles with Milken?

(see the answer key)

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