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This quiz consists of 5 multiple choice and 5 short answer questions through Part 1: Chapter 6, The Air Fund.

Multiple Choice Questions

1. What did Milken's involvement in this business do for him personally?
(a) He became very wealthy.
(b) He was finally able to take the train.
(c) He finally gained respect from Burnham.
(d) He married a movie star.

2. What did Joseph need to achieve his goal of making Drexel a world-class institution?
(a) to learn the definition of leveraged buyouts
(b) to get into M&A
(c) to stop dealing in junk bonds
(d) to mastermind an M&A for Drexel

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

4. What was the result of Tax Law reform in 1981?
(a) More and more companies were burdened with higher taxes.
(b) The increase in cash flow put companies in a better position to service debt.
(c) Big corporations faced running out of money.
(d) Only very large companies could make mergers and accquistions.

5. What did the Milken brothers do probably without notifying Drexel?
(a) set up their own investment banking business
(b) underwrite bond issues in excess for $1 trillion
(c) buy into a number of smaller investment firms
(d) investment partnerships that were to be registered with Bear Stearns

Short Answer Questions

1. What benefit did Milken arrange for his low grade investment group for the next 14 years?

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

3. Who are two examples of Milken clients who became quite wealthy?

4. What government regulation made it easier for multiple mergers in the 1980s?

5. What was the advantage FIFI and other like funds offer?

(see the answer key)

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