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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. How was Joseph building his diversified team?
(a) by training inexpensive novices to learn the business
(b) by computerizing his entire operation
(c) by taking his time to get the right people together
(d) by hiring people away from other firms for huge salaries

2. What did Joseph need to achieve his goal of making Drexel a world-class institution?
(a) to mastermind an M&A for Drexel
(b) to learn the definition of leveraged buyouts
(c) to stop dealing in junk bonds
(d) to get into M&A

3. 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

4. What commission did Drexel make on these funds?
(a) five eighths of a percent
(b) seven eighths of a percent
(c) one percent
(d) three quarters of a percent

5. What was the result of changes in the investment banking industry in the 1970s?
(a) Business concentrated in New York and Los Angeles.
(b) Regulations now made it harder to trade in junk bonds.
(c) Firms became highly competitive and business moved around.
(d) Many new firms came into existence and were soon taken over.

Short Answer Questions

1. What is RICO?

2. Why did Ichan and Kingsley limit themselves to 4.9% of shares in companies?

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

4. What did Milken's involvement in this business do for him personally?

5. What was Drexel's only real competition by the 1980s?

(see the answer key)

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