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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 14, Sovereign Privileges.

Multiple Choice Questions

1. What was the Wall Street attitude toward low grade bonds at the time Milken started trading in them?
(a) They were used as charitable donations.
(b) Then were used for scratch paper.
(c) They were unknown to Wall Street.
(d) They were looked down on.

2. What could happen to Drexel with so much power vested in one man?
(a) possible take over of the company
(b) possible abuse of power
(c) possible loss if anything happened to him
(d) possible collapse of the company

3. Where was most of Drexel's money made through investment partnerships?
(a) in Tokyo
(b) in New York
(c) in Paris
(d) in Beverly Hills

4. What was the Milken philosophy?
(a) to go after businesses that were sure to fail
(b) to go after businesses listed on the NYSE
(c) to go after startup businesses
(d) to go after businesses that were owner-managed

5. What is it called when someone holds a financial advantage over a company to force a sale?
(a) investment banking
(b) hijacking
(c) greenmail
(d) proxy fighting

Short Answer Questions

1. What influenced Milken to become interested in low grade bond portfolios?

2. What was the purpose of Fred Joseph's meeting at the Barbizon Plaza in New York?

3. Why was the partner Groupe Bruxelles Lambert S.A. not happy with Drexel and trying to take it over?

4. Where did most of the money come from when Icahn actually acquired ACF, a railroad car leasing company?

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

(see the answer key)

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