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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. Why did Milken take the bus from New Jersey to Wall Street?
(a) to avoid talking to Wall Street people
(b) because he liked the people on the bus
(c) because he could not afford the train
(d) because he did not drive a car

2. What did the Milken Group do in 1983?
(a) began making large charitable contributions
(b) cancel the annual Preditors' Ball
(c) moved from Century City to a building at Wilshire Boulevard and Rodeo Drive
(d) started buying up real estate in Los Angeles

3. What influenced Milken to become interested in low grade bond portfolios?
(a) a course he took at Wharton
(b) the Morgan report on bond yields
(c) the Hickman study, an analysis of bond yields
(d) an unexpected profit from his own low grade bonds

4. What did Milken's involvement in this business do for him personally?
(a) He became very wealthy.
(b) He was finally able to take the train.
(c) He finally gained respect from Burnham.
(d) He married a movie star.

5. What do raiders look for in companies to take over?
(a) companies saddled with heavy debt
(b) cash flow, which is one of the most important items in LBOs
(c) new research and development projects
(d) public good will, which continues after the takeover

Short Answer Questions

1. Why did the stripped bonds result in large tax benefits?

2. To troubled businesses, what was Drexel's unregistered exchange offer?

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

4. Who informed the SEC that he was attempting to gain control of Triagle Acquisition Corporation?

5. Who was another player involved in the National Can takeover attempt?

Short Essay Questions

1. How did Milken begin building his fortune?

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

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

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

5. Describe the National Can Company takeover.

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

7. Explain why Milken wanted to move his operation to Los Angeles.

8. Explain why Milken was the main subject of the Barbizon Plaza meeting.

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

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

(see the answer keys)

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