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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. On May 12, 1986, who was charged with insider trading and agreed to cooperate with the government?
(a) Fred Joseph
(b) Car Icahn
(c) Dennis Levine
(d) Lowell Milken

2. What did Milken take personally with his clients?
(a) if they divulged company secrets
(b) if they made more money than he did
(c) If they did business with someone else
(d) if they refused to attend the Predator's Ball

3. Why did people like Lawrence Coss of Green Tee Acceptance feel they were targets of hostile takeovers?
(a) because they were not Jewish
(b) because Milken did not like them
(c) because they wanted more money for their companies
(d) because they wouldn't give in to Milken

4. How were some people able to beat Milken on deals?
(a) by offering better prices
(b) by attacking Milken
(c) by hiring better salesmen
(d) by using illlegal means

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

Short Answer Questions

1. Where did Grant point out most of the junk bonds were held?

2. Why did Drexel become the target of both an SEC and federal grand jury investigations?

3. What did Milken want at work?

4. What company did Wedvick find with a high investment-grade rating?

5. What did Bergerac's associates tell him about Perelman?

Short Essay Questions

1. What evolved after many customers first dealt with Milken?

2. Describe the reason for Wedvick's problems with Atlantic Capital.

3. Why did Sanford Sigoloff switch from Salomon Brothers to Drexel when he was acquiring Wickes?

4. What was James Grant's position on where things would eventually lead in the credit cycle?

5. How did Milken disagree with the idea that liquidity was scarce?

6. Describe Milken's goals for the Asian markets.

7. What was Ronald Perelman's purpose for acquiring Pantry Pride?

8. How did Drexel achieve god-like status with investors?

9. How did political connections aid Drexel?

10. What were some of the detractors of LTOs saying about the practice in the 1980s?

(see the answer keys)

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