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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) Bill Gates
(b) Time-Warner
(c) Ted Turner
(d) Rupert Murdock

2. What was another company Wedvick used in his investment scheme?
(a) Kansa General Insurance Company in Helsinki, Finland
(b) Caribbean Investment Corporation
(c) Barzil International Insurance
(d) Banco de Mexico

3. 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.

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

5. Who at Drexel became a problem because of a lawsuit by Beverly Hills Savings and Loan?
(a) Carl Ichan
(b) Martin Siegel
(c) Fred Joseph
(d) Jim Dahl

6. Who did Joseph hire with a three-year contract calling for $3 million per year plus extras?
(a) Antonio Gebauer
(b) Robert Salsbury
(c) Dennis Levine
(d) Martin Siegel

7. 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) Right after the Preditors' Ball in 1987
(c) Long before the SEC began investigating Boesky
(d) In late December 1986

8. Why was the partner Groupe Bruxelles Lambert S.A. not happy with Drexel and trying to take it over?
(a) the falling stock price of drexel
(b) the Drexel practice of not paying dividends
(c) Drexel's secret bookkeeping
(d) the Drexel continued support of Mike Milken

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

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

11. How did Perelman acquire Technicolor?
(a) buying on credit
(b) paying full price
(c) selling junk bonds
(d) directing a hostile takeover

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

13. Who were the people Milken was happy to help in the business?
(a) people who left Drexel on friendly terms
(b) people who would destroy competitors
(c) people who would spy on the competition
(d) people who did not qualify to work at Drexel

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

15. To Drexel, what did certain concessions to clients mean?
(a) very little because they were so big
(b) a bad reputation among other investors
(c) more deals and more money down the road
(d) having clients indebted to them

Short Answer Questions

1. What was Perelman planning to do when he took over Pantry Pride in 1985?

2. Who told Perelman that Revlon was not for sale?

3. Why were Milken's imitators not as successful as he was?

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

5. What often benefited Drexel in dealing with its clients?

(see the answer keys)

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