1. Explain whether the following statements are true or false.

A) Corporate finance is a stream of finance focusing the management of money for individuals and business.

B) The existence of banks and other financial institutions allow investors to get the funding directly from the savers.

C) The benefit of sole proprietorship over partnership is that the owner earns a higher profit.

D) The shareholders of a corporation will not suffer a loss of capital as they enjoy limited liability.

E) The Octopus card can be regarded as a form of money while credit card cannot.

2. Which of the following situations may give rise to the Principal-Agent Problem?

A) You ask your stock broker who earn commissions per transaction to trade for you .

B) The restaurant owner hires a cashier for handling bills.

C) An accounting firm subscribed a software which requires periodic update.