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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 4, Merge with Mike.

Multiple Choice Questions

1. Why did Drexel remain a privately-held company?
(a) It was too much of a temptation for a hostile takeover.
(b) Joseph refused to allow it to happen.
(c) They did not want outsiders to get in on their business.
(d) Milken could then retain his need for secrecy.

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

3. What were Milken's results the first year in his new position at Drexel Burnham?
(a) Break even
(b) Fewer clients
(c) 100% profit
(d) 10% profit

4. What was the address of the new building in L. A.?
(a) Avenue of the Stars in Century City
(b) Hollywood and Vine
(c) Sunset and Vine
(d) Rodeo Drive and Wilshire

5. Why did Milken take the bus from New Jersey to Wall Street?
(a) to avoid talking to Wall Street people
(b) because he could not afford the train
(c) because he liked the people on the bus
(d) because he did not drive a car

Short Answer Questions

1. With whom was the firm of Drexel Burnham Lambert identified by the late 1970s?

2. What did Milken offer this market segment?

3. When he heard on the radio about a change in options to buy stocks, what did Milken do that saved Drexel Burnham Lambert?

4. Why did the new Drexel Burnham company give Milken a $2 million position?

5. What was the result of changes in the investment banking industry in the 1970s?

(see the answer key)

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