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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. To troubled businesses, what was Drexel's unregistered exchange offer?
(a) trading under the table
(b) creating additional Chinese paper
(c) a way of using stocks or bonds to meet the interest obligations
(d) lowering their interest rates to businesses

2. What was the estate they bought?
(a) the Pickford estate
(b) the Judy Garland estate
(c) the Clark Gable-Carole Lombard estate
(d) the Jackie Coogan estate

3. For whom did Milken do trading?
(a) not only for customers, but also his own account and his group's account
(b) just for Drexel Burnham Lambert because of the volume of work
(c) only for himself now because he was making so much money
(d) only for family and friends to keep attention away from himself

4. What was Fred Joseph's strategy for hiring employees for Drexel?
(a) paying higher commissions than anyone else
(b) overhiring to learn which are the ones to keep
(c) getting recommendations from bigger firms
(d) hiring from the smaller firms so that they saw it as a step up

5. 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

Short Answer Questions

1. What was Ichan able to do after he got a seat on the board of Tappan?

2. What is sometimes the result of an LBO?

3. What was HITS?

4. How much money and how fast did Drexel raise for the Phillips Petroleum proxy fight?

5. Why did Drexel have to separate from J. P. Morgan?

Short Essay Questions

1. How did Drexel go about creating the Air Fund in an effort to get into M&A?

2. Describe how Michael Milken is introduced in the book.

3. What was capturing Milken's interest in 1977?

4. What happened that started the Merger & Acquisition craze in the late 1970s and early 1980s?

5. How did Milken and Joseph create diversification for high-yield funds?

6. How did they get around the SEC bond registration rules?

7. Explain some of Drexel's problem clients in the early 1980s.

8. How did HITS come about and what was it?

9. Discuss Carl Icahn's expertise in proxy fights.

10. Who was Carl Icahn and how did he get into the hostile takeover business?

(see the answer keys)

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