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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What did the Milken Group do in 1983?
(a) started buying up real estate in Los Angeles
(b) began making large charitable contributions
(c) cancel the annual Preditors' Ball
(d) moved from Century City to a building at Wilshire Boulevard and Rodeo Drive

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

3. What did Joseph label his brainstorming information about LBOs?
(a) Air Fund or the highly confident letter
(b) the X-Files
(c) the M&A files
(d) the CIA files

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

5. What was the purpose of Fred Joseph's meeting at the Barbizon Plaza in New York?
(a) to undermine Milken and take over control of the Department
(b) consideration of all ideas, even the far-out and the flamboyant, instead of the conservative
(c) pirating talent from some of the biggest firms on Wall Street
(d) gathering inside information to take back to Los Angeles

6. What is sometimes the result of an LBO?
(a) a company that has more assets than liabilities
(b) a need to acquire other companies to pay for the buyout
(c) a corporation that is laden with debt
(d) a loss of company assets

7. What was Milken's goal by the early 1970s?
(a) He wanted to move into high-yield bonds.
(b) He wanted low-yield bonds to be its own specialty.
(c) He wanted to have his own firm.
(d) He wanted to own Drexel Burnham.

8. What were Milken's results the first year in his new position at Drexel Burnham?
(a) Break even
(b) 10% profit
(c) Fewer clients
(d) 100% profit

9. What was one thing Lowell Milken did for the company?
(a) find tax shelters for them
(b) make political contacts
(c) make the coffee
(d) keep out unwanted visitors

10. By 1983, what was the worth of Drexel's junk bond business?
(a) $40 billion
(b) $2 billion
(c) $460 billion
(d) $4.690 billion

11. Keeping New York office hours, at what time did they begin work in L. A.?
(a) 7:00 a.m.
(b) 6:30 a.m.
(c) 4:30 a.m.
(d) 10:00 a.m.

12. What was Milken's biggest contribution to Drexel in the early years?
(a) engineering the change over to computers
(b) an entry into the social circles of high-yield bond traders
(c) a study of the securities delivery system which cut the delivery time from five days to one
(d) a recruiting system to get the brightest Ivy League graduates

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

14. Who are two examples of Milken clients who became quite wealthy?
(a) Lawrence Welk and Ray Milland
(b) Marty Ingles and Shirley Jones
(c) Fred Carr and Thomas Spiegle
(d) James Brown and Kevin Bacon

15. What was HITS?
(a) High Interest Tax Service
(b) Hard Investment Trade Secrets
(c) a government investigation agency
(d) a high yield mutual fund that Drexel formed

Short Answer Questions

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

2. What was Milken's problem with back office people at Drexel?

3. For whom did Milken do trading?

4. Why did Milken takeovers work?

5. Who was behind the success of both First Executive and Columbia Savings?

(see the answer keys)

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