|Name: _________________________||Period: ___________________|
This test consists of 15 multiple choice questions and 5 short answer questions.
Multiple Choice Questions
1. What did Grant continue to predict?
(a) a gradual shift from vigilance to recklessness in lending and borrowing
(b) a major acquisition that would stagger the mind
(c) that M&As would revitalize the national economy
(d) the end of leveraged buyouts when everything good was taken over
2. Why did the LTV situation not affect Drexel?
(a) Drexel used its own money to secure the LTV bonds.
(b) Drexel pointed out the way LTV misused junk bonds.
(c) The thrifts that collapsed and the defaults that occurred were not among Milken's customers
(d) Drexel engineered a second buyout of LTV.
3. Why was the partner Groupe Bruxelles Lambert S.A. not happy with Drexel and trying to take it over?
(a) the falling stock price of drexel
(b) the Drexel practice of not paying dividends
(c) the Drexel continued support of Mike Milken
(d) Drexel's secret bookkeeping
4. What did Grant say the public was competing for at that point?
(a) for securities of high and higher yield - and poorer quality
(b) for more and more media attention
(c) for invitations to the Preditors' Ball
(d) for ownership in television stations and newspapers
5. How were some people able to beat Milken on deals?
(a) by offering better prices
(b) by attacking Milken
(c) by hiring better salesmen
(d) by using illlegal means
6. What is it called when one investor holds stock for another investor and thus conceals the identity of the owner?
(a) covering stock
(b) disguising stock
(c) parking stock
(d) shielding stock
7. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?
(a) Fred Joseph
(b) Car Icahn
(c) Dennis Levine
(d) Lowell Milken
8. Why did none of the thirty bills introduced covering takeovers in 1984-85 pass?
(a) Congress was waiting for a supreme court decision.
(b) Many politicians who received large contributions attended the Predators' Ball in 1986.
(c) The Congress did not think it was an important matter.
(d) Drexel took leading politicians on a vacation to the Bahamas.
9. What was Drexel able to do that made it so successful?
(a) to avoid reporting many of the transactions
(b) to place the unsecured debt that banks wouldn't touch
(c) to get around banking laws
(d) to hear about acquisitions before anyone else
10. What was another company Wedvick used in his investment scheme?
(a) Kansa General Insurance Company in Helsinki, Finland
(b) Barzil International Insurance
(c) Banco de Mexico
(d) Caribbean Investment Corporation
11. How did Drexel get around the law and continue the takeovers?
(a) by using preferred stock instead of bonds as a means of financing
(b) by using offshore banks to finance their deals
(c) by creating dummy companies to made the acquisitions
(d) by lobbying to get the rules overturned
12. What were many of the money managers who started with Milken in the late 1970s doing in the 1980s?
(a) creating new ways of financing takeovers
(b) staying with Milken because he was the best
(c) retiring and taking extended vacations
(d) running their own funds
13. What often benefited Drexel in dealing with its clients?
(a) positive publicity
(b) inside information
(c) equity from the deals they took part in
(d) leads for new clients
14. In what was Atlantic Capital involved?
(a) ponzi schemes
(b) forging bond documents
(c) unmonitored investments
(d) selling bond coupons
15. What had been Perelman's greatest acquisition before Revlon?
Short Answer Questions
1. What did Kansa and Clarendon both have that Wedvick needed?
2. Why did Atlantic Capital have to stop selling Wedvick's contracts?
3. What did Milken take personally with his clients?
4. How did the investigation appear at first?
5. How was Joseph building his diversified team?
This section contains 687 words
(approx. 3 pages at 300 words per page)