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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 12, Milken's Money Machine.

Multiple Choice Questions

1. Why was Milken so interested in low grade bonds?
(a) he liked to gamble big time
(b) they were the only ones he really understood
(c) equity offerings were not an option for the Drexel Burnham market
(d) that was all he could afford

2. Who was James Grant?
(a) the editor of Grant's Interest Rate Observer
(b) the chief of the SEC
(c) the head of Grant Investment Bank
(d) the author of the Grant Bill in Congress

3. What did Carl Ichan become known as?
(a) a takeover specialist, especially hostile takeovers
(b) losing proxy fights
(c) going bankrupt
(d) a movie mogul

4. What influenced Milken to become interested in low grade bond portfolios?
(a) a course he took at Wharton
(b) the Morgan report on bond yields
(c) an unexpected profit from his own low grade bonds
(d) the Hickman study, an analysis of bond yields

5. For whom did Milken do trading?
(a) only for himself now because he was making so much money
(b) just for Drexel Burnham Lambert because of the volume of work
(c) only for family and friends to keep attention away from himself
(d) not only for customers, but also his own account and his group's account

Short Answer Questions

1. What became the name of bonds that come into being during highly leveraged takeovers?

2. To find more ways for their clients to make money, to what did Milken and Joseph turn their attention?

3. Where did Grant point out most of the junk bonds were held?

4. Who was another player involved in the National Can takeover attempt?

5. Who dominated the market in junk bond funds from 1978 on?

(see the answer key)

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