14. Which of the following constitutes an example of an agency problem:

Select one:

1. The CEO of a retail company opening new stores in his hometown because he understands the market there very well

2. The CFO deciding to hire an auditing firm that charges less fees than other suiting firms

3. The CFO receives a larger bonus despite the companys poor performance in a given year.

4. The CEO buying a corporate private jet that will be used exclusively to travel to clientss sites quickly

5. A company using an accounting agency to hire qualified accountants

15. The following are all example of financial markets except:

Select one:

1. Derivatives markets

2. The toronto Stock Exchange

3. Large department stores

4. Exchange trading floors

5. All of these are examples of financial markets

16. Kim has a contracting job with a local trades firm. The agreement is such that Kim receives payments for the next 3 years growing at 2%. The first payments will take place in a years time and is $50,000. If the markets discount rate is 10% what is this job worth to Kim today?

Select one:

1. $129,220.44

2. $126.686.70

3. $124,342.60

4. $150,000.00

5. $136,776.86

17. Sam decided to buy an annuity due today. This annuity will pay $11,000 each year for 15 years. The payments start today, and the interest rate is 6%. How much does Sam have to pay to purchase this annuity.

Select one:

1. $110,628.04

2. $113,244.82

3. $165,000.00

4. $106,834.74

5. $111,555.26

18. RIcky is looking to buy a house that costs $500,000 for which you can afford a down payment of 20%. The bank offers Ricky a mortgage rate of 9% compounded semi-annually over a 25-year period. What is your monthly mortgage payment?

1. $3,356.79

2. $4,195.98

3. $3,311.91

4. $1,333.33

5. $4,139.89

19. Which of the following is false about the CEO and senior management of a corporation:

Select one:

1. For the most part, the CEO and senior management make all day-to-day decisions for the firm

2. The CEO and senior management decide on the mix of debt and equity a firm will have in its capital structure

3. The CEO is elected by shareholders

4. The CEOs main job is to maximize shareholder value

5. The CEO and senior management decide on which new projects to invest in

20. In the case of a corporate bankruptcy, which of the following groups will be pid last?

Select one:

1. Preferred shareholders

2. Private debt holder. (such as a bank or financial institution).

3. Common shareholders

4. Public debt holders (such as investors)

5. All the groups are paid at the same time