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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

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

2. What is a proxy fight?
(a) two blondes fighting
(b) stockholder meetings where some are locked out
(c) having someone else fight a duel for you
(d) stockholder meetings where the management team is voted out

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

4. What is RICO?
(a) Mexican Stock Exchange
(b) Racketeer Influenced Corrupt Organizations Act
(c) Reporting Interest In Company
(d) The Bank of Brazil

5. What was Fred Joseph's strategy for hiring employees for Drexel?
(a) paying higher commissions than anyone else
(b) overhiring to learn which are the ones to keep
(c) getting recommendations from bigger firms
(d) hiring from the smaller firms so that they saw it as a step up

Short Answer Questions

1. What was Milken's problem with back office people at Drexel?

2. Why did Drexel want Carl Icahn as a client?

3. What was HITS?

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

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

Short Essay Questions

1. How did Milken help Drexel on his drive from New York to California?

2. How did HITS come about and what was it?

3. How did Milken begin building his fortune?

4. How did Milken and Joseph create diversification for high-yield funds?

5. Why was Milken not employed by some of the biggest Wall Street firms?

6. Describe how Michael Milken is introduced in the book.

7. What was the subject of the meeting at the Barbizon Plaza in New York held by Fred Joseph?

8. Give examples of people other than his staff who become quite wealthy following Milken's direction.

9. How did they get around the SEC bond registration rules?

10. Explain why Drexel did not become a publicly-traded company?

(see the answer keys)

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