16. You borrow $800 from your bank on a 90-day promissory note. A. You are the seller of a bond. B. You are the seller of a bill. C. You are the purchaser of a note. D. You are the issuer of a note. E. You are the buyer of a bill. 17. The Federal Reserve regulates and supervises all U.S. banks. A. True B. False 18. The cost of debt is less than which of the following? A + g. * Po- B. + C. The cost of debt is less than both A and B. D. The cost of debt is less than neither Anor B. 19. The risk premium in an interest rate includes the real rate of return. A True B. False 20. Which statement is true? A. A corporation with positive net income must pay a dividend to its common shareholders. B. Financial intermediation necessarily involves a financial institution C. Shareholders must vote by proxy. D. As a general rule, a higher P/E ratio indicates a riskier stock. 21. The net present value of a project has been found to be so. The internal rate of return on the project is 8.6%. If a discount rate of 10.5% had been used to determine NPV, then... A. The project would have been rejected. B. The project would have been accepted. C. The NPV would have stayed the same. D. The internal rate of return would have changed. E. Not enough information is given to know if any of the above answers is right or wrong. 22. If a company's current assets rise more than its current liabilities, then A. free cash flow will go up B. free cash flow will go down C. free cash flow will not be affected D. free cash flow can no longer be calculated 23. The MD&A would be found in A. Form 8K (B) Form 10K C. Both A. and B. D. Neither A. nor B. 24. The respondear superior is the A. agent B. principal C. both A. and B. D. It depends upon the situation