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

Multiple Choice Questions

1. What did Milken want at work?
(a) fancy titles and gold letterhead
(b) his photo in the annual report
(c) distance between him and the powers that be at Drexel
(d) to run the Drexel firm

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

3. What was Drexel able to do that made it so successful?
(a) to avoid reporting many of the transactions
(b) to get around banking laws
(c) to hear about acquisitions before anyone else
(d) to place the unsecured debt that banks wouldn't touch

4. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?
(a) Fred Joseph
(b) Car Icahn
(c) Lowell Milken
(d) Dennis Levine

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

6. What concept did Milken continue to support?
(a) the cautions of using junk bonds
(b) the owner-manager of businesses
(c) the switch to high-yield securities
(d) the legality of takeovers

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

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

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

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

11. What became the craze on Wall Street in 1986?
(a) something called collective bargaining
(b) something called merchant banking
(c) something called investment underwriting
(d) something called equity sharing

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

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

14. What was Peer Wedvick devising?
(a) money laundering
(b) flipping houses and commercial buildings
(c) a scheme to sell contracts involving housing funds
(d) buying commercial paper

15. How did Milken's unit function within the larger firm?
(a) as the firm's banker
(b) as a separate firm within Drexel
(c) as a front for other Drexel activities
(d) as an integrated member of the firm

Short Answer Questions

1. What was the result when rules on M&A were finally adopted by the Congress?

2. What did Grant think about the junk bond business?

3. What was the result when many Drexel employees were not allowed into Milken's investment groups?

4. What did Kansa and Clarendon both have that Wedvick needed?

5. In many ways, what became the role of Milken?

(see the answer keys)

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