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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. Where was much of the money coming from for takeovers in the 1980s?
(a) foreign investors with extra capital
(b) big blind pools that Milken would raise for his customers
(c) the break up and sale of raided company divisions
(d) fake junk bonds imitating Milken's bonds

2. Who was Dr. Feelgood of Drexel?
(a) Tubby Burnham
(b) Fred Joseph
(c) Michael Milken
(d) Lowell Milken

3. What was the object of gaining control of a company and sell off many of its divisions?
(a) to be left with the best part of the company almost for free
(b) to avoid reporting where the purchas price was coming from
(c) to bring the bought company down to manageable size
(d) to make money on the sales and then dump the parent company

4. What was the Wall Street attitude toward low grade bonds at the time Milken started trading in them?
(a) They were used as charitable donations.
(b) They were unknown to Wall Street.
(c) Then were used for scratch paper.
(d) They were looked down on.

5. Why did Drexel Burnham Lambert agree to let Milken move his operation at a cost of millions of dollars?
(a) Milken threatened to leave.
(b) Milken had some inside information he could use in L. A.
(c) Milken was responsible for almost all of the firm's profits.
(d) Milken was then major stock holder in the company.

Short Answer Questions

1. Keeping New York office hours, at what time did they begin work in L. A.?

2. Who becomes Milken's ally and public face in 1974?

3. Why did Ichan and Kingsley limit themselves to 4.9% of shares in companies?

4. What company was a proxy fight that Carl Ichan lost?

5. What advantage did Milken's kind of debt offer?

Short Essay Questions

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

2. Explain why Drexel did not become a publicly-traded company?

3. Give examples of people other than his staff who become quite wealthy following Milken's direction.

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

5. How did Fred Joseph begin his goal of making Drexel a top notch firm in fifteen years?

6. Explain Milken's relationship with his staff.

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

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

9. What were some of Carl Icahn's problems after his successful TWA takeover?

10. Explain the beginnings of blind pools arranged by Milken.

(see the answer keys)

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