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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. Where did Milken want to move his bond operation unit in 1978?
(a) Las Vegas
(b) Los Alamos
(c) Las Cruces
(d) Los Angeles

2. What does FIFI stand for?
(a) Five Investment Features Initiative
(b) Field Investment File Information
(c) First Investors Fund for Income
(d) Fund Income from Favored Investors

3. What became the name of bonds that come into being during highly leveraged takeovers?
(a) Chinese paper
(b) Tickertape
(c) Hot paper
(d) Paper trails

4. What did the Federal Home Loan Bank Board discover about what Spiegle at Columbia Savings and Loan was doing?
(a) manipulating his competitors out of business
(b) using Columbia Savings and Loan money to finance his own investments
(c) financing his junk bond purchases with federally insured funds
(d) making fictitious home loans

5. What advantage did Milken's kind of debt offer?
(a) It was easier to use than getting a bank loan.
(b) It was separate from bank loans and the bondholder could sell his bonds whenever he wanted
(c) It did not tie up cash the way loan repayments did.
(d) It was done under the table so the banks did not know about it.

Short Answer Questions

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

2. What was HITS?

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

4. What was a cause of the market crash of 1974?

5. Eventually, what did First Federal and Columbia Savings become?

(see the answer key)

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