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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. What was Milken's biggest contribution to Drexel in the early years?
(a) a recruiting system to get the brightest Ivy League graduates
(b) a study of the securities delivery system which cut the delivery time from five days to one
(c) engineering the change over to computers
(d) an entry into the social circles of high-yield bond traders

2. Where did most of the money come from when Icahn actually acquired ACF, a railroad car leasing company?
(a) Ichan got the money from his uncle.
(b) Much of the purchase price came from the sale of some of the company's divisions.
(c) Milken financed much of the price.
(d) Ichan sold all of his Milken junk bonds.

3. Who moved to Los Angeles with Milken?
(a) most of his friends
(b) most of his staff
(c) most of his relatives
(d) several Wall Street firms

4. How did Milken decide to help Peltz?
(a) by making him a partner in his bond business
(b) by loaning him $10 million from his personal fortune
(c) by underwriting $100 million in junk bonds for Triangle
(d) by advision him how to avoid bankruptcy

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

Short Answer Questions

1. What was the goal of Nelson Peltz?

2. Where was much of the money coming from for takeovers in the 1980s?

3. What is sometimes the result of an LBO?

4. What was Milken's goal by the early 1970s?

5. Why did Drexel want Carl Icahn as a client?

Short Essay Questions

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

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

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

4. Explain how Milken became nervous over large bond deals.

5. Describe the National Can Company takeover.

6. What was Milken's greatest contribution to the Drexel firm when he was a part-time employee?

7. Why did Thomas Spiegel come under investigation by the FHLBB?

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

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

10. What were some complications of the move to Century city for Drexel?

(see the answer keys)

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