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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 advantage did Milken's kind of debt offer?
(a) It was done under the table so the banks did not know about it.
(b) It was easier to use than getting a bank loan.
(c) It was separate from bank loans and the bondholder could sell his bonds whenever he wanted
(d) It did not tie up cash the way loan repayments did.

2. By 1983, what was the worth of Drexel's junk bond business?
(a) $40 billion
(b) $2 billion
(c) $4.690 billion
(d) $460 billion

3. With whom was the firm of Drexel Burnham Lambert identified by the late 1970s?
(a) Ronald Reagan
(b) Michael Milken
(c) Tubby Burnham
(d) Fred Joseph

4. When he heard on the radio about a change in options to buy stocks, what did Milken do that saved Drexel Burnham Lambert?
(a) cabeled DBL to warn them
(b) made calls from pay phones
(c) turned around and went back
(d) stopped in St. Louis and started buying

5. When were the tax laws changed to minimize the benefits of stripping?
(a) In 1982
(b) In 1990
(c) In 1991
(d) In 1989

Short Answer Questions

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

2. What was Fred Joseph's strategy for hiring employees for Drexel?

3. Why did Drexel Burnham Lambert agree to let Milken move his operation at a cost of millions of dollars?

4. What was Milken's goal by the early 1970s?

5. What did the Milken Group do in 1983?

(see the answer key)

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