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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. What was it about Milken that impressed his clients?
(a) his willingness to bargain when he sold them junk bonds
(b) his connections with politicians and movie stars
(c) his inside information about the junk bond companies
(d) his knowledge and memory for details about every bond there was.

2. 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

3. 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) getting recommendations from bigger firms
(d) hiring from the smaller firms so that they saw it as a step up

4. What was the Wall Street attitude toward low grade bonds at the time Milken started trading in them?
(a) They were used as charitable donations.
(b) They were unknown to Wall Street.
(c) They were looked down on.
(d) Then were used for scratch paper.

5. What was Milken's goal by the early 1970s?
(a) He wanted low-yield bonds to be its own specialty.
(b) He wanted to own Drexel Burnham.
(c) He wanted to move into high-yield bonds.
(d) He wanted to have his own firm.

Short Answer Questions

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

2. What does FIFI stand for?

3. How did Milken break into the Las Vegas gambling business community?

4. What did Milken offer this market segment?

5. Where did Milken want to move his bond operation unit in 1978?

(see the answer key)

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