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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. Who becomes Milken's ally and public face in 1974?
(a) Fred Joseph
(b) Cary Grant
(c) Tubby Burnham
(d) Khun Loeb

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

3. What was the result in 1974 when International Nickel Company raided ESB?
(a) the beginning of many hostile raids
(b) Milken denounced the deal
(c) no one was surprised
(d) junk bonds became passe

4. What was the object of gaining control of a company and sell off many of its divisions?
(a) to bring the bought company down to manageable size
(b) to avoid reporting where the purchas price was coming from
(c) to make money on the sales and then dump the parent company
(d) to be left with the best part of the company almost for free

5. How did Drexel get around the law and continue the takeovers?
(a) by using offshore banks to finance their deals
(b) by lobbying to get the rules overturned
(c) by using preferred stock instead of bonds as a means of financing
(d) by creating dummy companies to made the acquisitions

Short Answer Questions

1. What was the result of changes in the investment banking industry in the 1970s?

2. What was the result of Tax Law reform in 1981?

3. What did Carl Ichan become known as?

4. Who dominated the market in junk bond funds from 1978 on?

5. What was the advantage FIFI and other like funds offer?

(see the answer key)

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