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This quiz consists of 5 multiple choice and 5 short answer questions through Part 3: Chapter 17, The Humbling.

Multiple Choice Questions

1. What company did Wedvick find with a high investment-grade rating?
(a) Clarendon, a Bermuda based reinsurance company
(b) Drexel
(c) Standard and Poors
(d) Mutual of Omaha

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

3. Who were some customers who received better deals from Milken?
(a) Oscar Wyatt and Coastal Corporation
(b) Murdock and Turner
(c) Carl Icahn and Samuel Heyman
(d) Perelman and Rocho

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 make money on the sales and then dump the parent company
(c) to avoid reporting where the purchas price was coming from
(d) to be left with the best part of the company almost for free

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

Short Answer Questions

1. What indicated the level of fear at Drexel during the investigations?

2. What was one of the most important factors in the leveraged buyout deals?

3. What two large companies did Drexel underwrite bond issues for in a ten-day period?

4. What happened to the blue-chip investors Drexel was trying to attack?

5. Why was Drexel Burnham's investment banking business diminished by 1975?

(see the answer key)

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