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This quiz consists of 5 multiple choice and 5 short answer questions through Part 2: Chapter 8, Icahn-TWA: From Greenmailer to Manager-Owner.

Multiple Choice Questions

1. How much money and how fast did Drexel raise for the Phillips Petroleum proxy fight?
(a) $10 million in a week
(b) a half billion in three days
(c) $1.5 billion in forty-eight hours
(d) 2 billion in one month

2. Why did Drexel want Carl Icahn as a client?
(a) He was a risk taker that would make money even if he failed.
(b) Most other firms wouldn't handle him and he would be willing to pay the price to the investors of junk bonds.
(c) Icahn would not use junk bonds to finance his hostile takeovers.
(d) Icahn had liquid capital in offshore banks.

3. What company was a proxy fight that Carl Ichan lost?
(a) Tappan
(b) the Times, Inc.
(c) Hammermill
(d) AB Electrolux

4. Where was much of the money coming from for takeovers in the 1980s?
(a) the break up and sale of raided company divisions
(b) foreign investors with extra capital
(c) big blind pools that Milken would raise for his customers
(d) fake junk bonds imitating Milken's bonds

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

Short Answer Questions

1. To troubled businesses, what was Drexel's unregistered exchange offer?

2. When he heard on the radio about a change in options to buy stocks, what did Milken do that saved Drexel Burnham Lambert?

3. What was HITS?

4. Why did the stripped bonds result in large tax benefits?

5. What did the Milken Group do in 1983?

(see the answer key)

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