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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 3, Transformation.

Multiple Choice Questions

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

2. Who moved to Los Angeles with Milken?
(a) several Wall Street firms
(b) most of his relatives
(c) most of his staff
(d) most of his friends

3. What influenced Milken to become interested in low grade bond portfolios?
(a) the Hickman study, an analysis of bond yields
(b) a course he took at Wharton
(c) the Morgan report on bond yields
(d) an unexpected profit from his own low grade bonds

4. What are REITs?
(a) raw energy investment tables
(b) real estate instruments like mortgages
(c) rare employee investment tallies
(d) really extended investment trials

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

Short Answer Questions

1. What was the estate they bought?

2. Why did Drexel have to separate from J. P. Morgan?

3. Why was Milken so interested in low grade bonds?

4. Who dominated the market in junk bond funds from 1978 on?

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

(see the answer key)

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