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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 made a Wickes takeover so attractive to Sanford Sigoloff?
(a) It was emerging from Chapter 11 bankruptcy with a large tax-loss carryforward
(b) It was over valued on the Wall Street Stock Exchange.
(c) Wickes was his mother's maiden name.
(d) It was losing stock value and had few debts.

2. For whose benefit were most of the investment partnerships?
(a) for the corporate employees
(b) for potential clients
(c) for the Drexel firm
(d) for Milken

3. What were many of the money managers who started with Milken in the late 1970s doing in the 1980s?
(a) running their own funds
(b) staying with Milken because he was the best
(c) creating new ways of financing takeovers
(d) retiring and taking extended vacations

4. What happened in April of 1987 while the investigation of Milken and Drexel was proceeding?
(a) The Predators' Ball was cancelled.
(b) The 1987 Predators' Ball was held.
(c) Milken fled the country.
(d) Milken tried to bribe an FBI undercover agent.

5. What was one of the most important factors in the leveraged buyout deals?
(a) support of key Congressmen
(b) the zero coupon bond
(c) knowing Michael Milken
(d) loopholes in the banking laws

Short Answer Questions

1. What was beginning to happen during this time?

2. Who did Joseph hire with a three-year contract calling for $3 million per year plus extras?

3. What did the 1985 President's Council of Economic Advisers report on the issue of M&A conclude?

4. What did Milken do for people who had worked with him?

5. By the fall of 1989, what were many people doing?

Short Essay Questions

1. Before Revlon, what had been Perelman's biggest success?

2. What were the results of the ongoing investigations of Drexel and Milken?

3. How was fear affecting Drexel during the investigations?

4. What role did LTV play in identifying a weakness in the junk market?

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

6. How did Peer Wedvick satisfy his need for an institution with a high investment-grade rating?

7. State some of the details about Milken's being investigated for insider trading.

8. How was favoritism shown at Drexel?

9. Why were other investment firms not as successful as Drexel?

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

(see the answer keys)

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