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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 Drexel become the target of both an SEC and federal grand jury investigations?
(a) Milken and Drexel began making off-shore deposits.
(b) Milken and Drexel immediately hired high powered lawyers.
(c) Milken and Drexel had underwritten quite a bit of Boesky debt.
(d) Milken and Drexel refused to cooperate with the investigation.

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

3. Why were Milken's imitators not as successful as he was?
(a) They had no idea how he was doing his business.
(b) They could not invest as much firm money.
(c) They could not raise the money Milken could or with the same speed.
(d) They were bound by deeper government regulations.

4. When did the trading of Milken, Icahn, Posner and Boyd Jeffries, as well as others come under investigation?
(a) Within minutes of the announcement of Boesky's plea bargain
(b) In late December 1986
(c) Long before the SEC began investigating Boesky
(d) Right after the Preditors' Ball in 1987

5. Who paid $2-billion for the Metromedia television stations and their assets?
(a) Rupert Murdock
(b) Ted Turner
(c) Bill Gates
(d) Time-Warner

Short Answer Questions

1. How did Milken's unit function within the larger firm?

2. Why did people like Lawrence Coss of Green Tee Acceptance feel they were targets of hostile takeovers?

3. What did Drexel think about the Japanese acceptance of junk bonds used in takeovers?

4. How were some people able to beat Milken on deals?

5. What did Bergerac and his allies forget in the process of fighting the takeover?

Short Essay Questions

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

2. How was fear affecting Drexel during the investigations?

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

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

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

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

7. Tell something of the anticipation associated with SEC and FBI investigations into Drexel and Milken.

8. How did political connections aid Drexel?

9. How widespread was Milken's competition by the fall of 1986?

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

(see the answer keys)

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