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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. What did the Milken Group do in 1983?
(a) began making large charitable contributions
(b) cancel the annual Preditors' Ball
(c) started buying up real estate in Los Angeles
(d) moved from Century City to a building at Wilshire Boulevard and Rodeo Drive

2. 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) the Hickman study, an analysis of bond yields
(d) an unexpected profit from his own low grade bonds

3. Why did the LTV situation not affect Drexel?
(a) Drexel used its own money to secure the LTV bonds.
(b) Drexel engineered a second buyout of LTV.
(c) Drexel pointed out the way LTV misused junk bonds.
(d) The thrifts that collapsed and the defaults that occurred were not among Milken's customers

4. By 1983, what was the worth of Drexel's junk bond business?
(a) $4.690 billion
(b) $40 billion
(c) $2 billion
(d) $460 billion

5. Why was the partner Groupe Bruxelles Lambert S.A. not happy with Drexel and trying to take it over?
(a) the Drexel continued support of Mike Milken
(b) Drexel's secret bookkeeping
(c) the falling stock price of drexel
(d) the Drexel practice of not paying dividends

Short Answer Questions

1. Why did Posner back out of the National Can deal?

2. Why was Drexel Burnham's investment banking business diminished by 1975?

3. What was Perelman planning to do when he took over Pantry Pride in 1985?

4. What are two other notable takeovers done by Perelman after Revlon?

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

(see the answer key)

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