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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. Where did Milken and his wife buy a house?
(a) Santa Monica
(b) Beverley Hills
(c) Encino
(d) San Clemente

2. Why did Drexel Burnham Lambert agree to let Milken move his operation at a cost of millions of dollars?
(a) Milken threatened to leave.
(b) Milken was responsible for almost all of the firm's profits.
(c) Milken was then major stock holder in the company.
(d) Milken had some inside information he could use in L. A.

3. What did Milken offer this market segment?
(a) a hope for recovery
(b) a protection from takeover
(c) a new kind of debt instrument
(d) ten cents on the dollar

4. How did the firm now have equity stakes in most of the companies that it financed?
(a) by using the firm's capital to finance the companies
(b) by swapping Chinese paper for stock in the companies
(c) by demanding larger stakes in the companies
(d) by buying stakes in many companies instead of financing them

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

Short Answer Questions

1. What are REITs?

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

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. What did Milken's involvement in this business do for him personally?

5. For whom did Milken do trading?

(see the answer key)

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