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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 did Kansa and Clarendon both have that Wedvick needed?
(a) no supervision
(b) excess capital
(c) corrupt employees
(d) AA rating

2. What company did Wedvick find with a high investment-grade rating?
(a) Standard and Poors
(b) Mutual of Omaha
(c) Clarendon, a Bermuda based reinsurance company
(d) Drexel

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

4. What was Perelman planning to do when he took over Pantry Pride in 1985?
(a) to use Pantry Pride and its income sheltering tax loss to acquire Revlon
(b) to make Pantry Pride attractive to other supermarkets
(c) to create positions for his sons and other family members.
(d) to run the business and get out of doing takeovers

5. How was Joseph building his diversified team?
(a) by training inexpensive novices to learn the business
(b) by taking his time to get the right people together
(c) by hiring people away from other firms for huge salaries
(d) by computerizing his entire operation

Short Answer Questions

1. What made a Wickes takeover so attractive to Sanford Sigoloff?

2. Why was Revlon attracting raiders?

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

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

5. Who told Perelman that Revlon was not for sale?

Short Essay Questions

1. How did Milken's power in the industry benefit Drexel?

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

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

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

5. How and why did Milken avoid personal publicity?

6. How did political connections aid Drexel?

7. Describe the attempts to prevent Perelman's acquisition of Revlon.

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

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

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

(see the answer keys)

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