1. A sole proprietorship is owned by: A. one person. B. two of more persons. C. shareholders. D. bankers. 2. Which of the following statements regarding limited partnerships is TRUE? A. There is no limit on a limited partner's liability. B. A limited partner's liability is limited by the amount of their investment. C. A limited partner is not liable until all the assets of the general partners have been exhausted. D. A general partner's liability is limited by the amount of their investment. 3. An agency problem can be alleviated by: A. having a large shareholder B. compensating managers in such a way that acting in the best interest of shareholders is also in the best interest of managers. C. the threat of a potential takeover with the decreasing stock price. D. All of the above 4. Valiant Corp. is a C corporation that earned $5 per share before it paid any taxes. Valiant Corp. retained $1 of after-tax earnings for reinvestment and distributed what remained in dividend payments. If the corporate tax rate was 40% and dividend earnings were taxed at 15%, what was the value of the dividend earnings received after-tax by a holder of 100,000 shares of Valiant Corp.? A. $400,000 B. $170,000 C. $300,000 D. $255,000 5. Which of the following statements is TRUE? A. An inverted yield curve generally signals an expected decline in future interest rates. B. An inverted yield curve is often interpreted as a positive forecast for economic growth. C. The rate of growth of your purchasing power is determined by the nominal interest rate. D. None of the above