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

Multiple Choice Questions

1. Who paid $2-billion for the Metromedia television stations and their assets?
(a) Rupert Murdock
(b) Ted Turner
(c) Bill Gates
(d) Time-Warner

2. Why did none of the thirty bills introduced covering takeovers in 1984-85 pass?
(a) Drexel took leading politicians on a vacation to the Bahamas.
(b) Congress was waiting for a supreme court decision.
(c) Many politicians who received large contributions attended the Predators' Ball in 1986.
(d) The Congress did not think it was an important matter.

3. Why did Milken hold a mini-Predators' Ball in Tokyo?
(a) The Balls in Los Angeles were drawing too much publicity.
(b) He did things like that on a whim.
(c) He was invited by Japanese businessmen.
(d) He was looking at getting into foreign markets.

4. What was beginning to happen during this time?
(a) People were making vast amounts of money trading junk bonds.
(b) Junk bonds began to disappear from the market.
(c) Unemployment shot up as a results of the mergers and acquisitions.
(d) Junk bonds were becoming poorer in quality and there were more bankruptcies and defaults

5. What happened to the plan for moving to the Seven World Trade Center?
(a) It was held up by the FBI.
(b) It decreased the number of floors.
(c) It was abandoned.
(d) It went ahead.

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

7. When did Drexel begin dealing based on insider information?
(a) When they began backing OLTs.
(b) When the Phillips Petroleum deal got underway.
(c) When Milken financed Ivan Boesky.
(d) When Milken hooked up with Carl Ichan.

8. What happened in April of 1987 while the investigation of Milken and Drexel was proceeding?
(a) Milken tried to bribe an FBI undercover agent.
(b) The 1987 Predators' Ball was held.
(c) The Predators' Ball was cancelled.
(d) Milken fled the country.

9. What did Milken demand from everyone around him?
(a) any information they overheard
(b) things done the way he wanted them done
(c) more money for his services
(d) that they call him Mr. Milken

10. How was Drexel being spoken of after the success of so many hostile takeovers?
(a) as the devil in disguise
(b) as near criminals skirting the law
(c) a god that could do whatever it wanted in the niche it was in
(d) as the investment firm of the future

11. What made Drexel's troubles even worse after Boesky Day?
(a) The firm was hated by many on Wall Street.
(b) The firm defaulted on its building mortgage.
(c) Both New York and California started independent investigations.
(d) The FBI wiretapped Milken's and Drexel's offices.

12. What was Samuel Heyman able to get from Milken?
(a) 100% capital from drexel
(b) names of Drexel's best investors
(c) an investment-grade rate when he purchased GAF
(d) an office suite in the drexel building

13. When did the trading of Milken, Icahn, Posner and Boyd Jeffries, as well as others come under investigation?
(a) Within minutes of the announcement of Boesky's plea bargain
(b) Long before the SEC began investigating Boesky
(c) Right after the Preditors' Ball in 1987
(d) In late December 1986

14. What had been Perelman's greatest acquisition before Revlon?
(a) NBC
(b) Todd-a-o
(c) Cinemascope
(d) Technicolor

15. What was the result when rules on M&A were finally adopted by the Congress?
(a) They put everyone out of business.
(b) They were easy for the investment banking firms to get around.
(c) They made it impossible to sell parts of a company to pay for the acquisition.
(d) They made it almost impossible for raiders to operate.

Short Answer Questions

1. What company did Wedvick find with a high investment-grade rating?

2. Why did Atlantic Capital have to stop selling Wedvick's contracts?

3. What could happen to Drexel with so much power vested in one man?

4. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?

5. Why did the LTV situation not affect Drexel?

(see the answer keys)

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