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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 10, 'Drexel is like a God'.

Multiple Choice Questions

1. Where did most of the money come from when Icahn actually acquired ACF, a railroad car leasing company?
(a) Ichan sold all of his Milken junk bonds.
(b) Ichan got the money from his uncle.
(c) Milken financed much of the price.
(d) Much of the purchase price came from the sale of some of the company's divisions.

2. What was Drexel able to do that made it so successful?
(a) to avoid reporting many of the transactions
(b) to get around banking laws
(c) to hear about acquisitions before anyone else
(d) to place the unsecured debt that banks wouldn't touch

3. Who was behind the success of both First Executive and Columbia Savings?
(a) Lowell Milken
(b) Thomas Spiegle
(c) Fred Carr
(d) Mike Milken

4. Why were Milken's imitators not as successful as he was?
(a) They could not invest as much firm money.
(b) They were bound by deeper government regulations.
(c) They had no idea how he was doing his business.
(d) They could not raise the money Milken could or with the same speed.

5. What advantage did Milken's kind of debt offer?
(a) It was easier to use than getting a bank loan.
(b) It did not tie up cash the way loan repayments did.
(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

Short Answer Questions

1. What did the Federal Home Loan Bank Board discover about what Spiegle at Columbia Savings and Loan was doing?

2. What did the 1985 President's Council of Economic Advisers report on the issue of M&A conclude?

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

4. How did the firm now have equity stakes in most of the companies that it financed?

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

(see the answer key)

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