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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. How did bondholders often operate in noncompliance with SEC rules?
(a) not declaring income from bond sales
(b) overstating the values of bonds
(c) selling bonds before they were registered
(d) secrecy in the bond market

2. What did Milken refuse to have in the Drexel annual report?
(a) the names of his staff
(b) his photo and the organization of his staff
(c) his letter to the shareholders
(d) a description of his operation

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

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

5. 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) Then were used for scratch paper.
(c) They were looked down on.
(d) They were unknown to Wall Street.

Short Answer Questions

1. Why did Milken take the bus from New Jersey to Wall Street?

2. To troubled businesses, what was Drexel's unregistered exchange offer?

3. Why were Milken's imitators not as successful as he was?

4. What was beginning to happen during this time?

5. What did Grant think about the junk bond business?

(see the answer key)

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