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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 did the Revlon takeover prove?
(a) that Revlon stock was way overvalued
(b) that Perelman knew nothing about hostile takeovers
(c) that women will buy Revlon no matter who owns the company
(d) the power of Milken and junk bond financing

2. Why did the LTV situation not affect Drexel?
(a) Drexel used its own money to secure the LTV bonds.
(b) Drexel pointed out the way LTV misused junk bonds.
(c) The thrifts that collapsed and the defaults that occurred were not among Milken's customers
(d) Drexel engineered a second buyout of LTV.

3. What benefit did Milken arrange for his low grade investment group for the next 14 years?
(a) 35% of the profits
(b) half the profits
(c) extensive paid vacations
(d) higher salaries and larger offices

4. For whose benefit were most of the investment partnerships?
(a) for potential clients
(b) for the Drexel firm
(c) for Milken
(d) for the corporate employees

5. What was the average net worth of members of Milken's core group after being with him five years?
(a) $5 million
(b) $10 million
(c) $20 million
(d) $12 million

Short Answer Questions

1. What was Fred Joseph's strategy for hiring employees for Drexel?

2. What did Milken take personally with his clients?

3. What advantage did Milken's kind of debt offer?

4. What are REITs?

5. How did Perelman acquire Technicolor?

(see the answer key)

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