1.Corporate governance is the set of rules that control a companys behavior towards its directors, managers, employees, shareholders, creditors, customers, competitors, and community. Corporate governance can help control agency problems.

True

False

2.The three aspects of cash flows that affect an investments value consist of the amount of expected cash flows, the timing of the cash flow stream, and the risk of the cash flows.

true

false

3. Which one of the following has the highest effective annual rate?

		5.5% compounded annually
		5.5% compounded quarterly
		6.0% compounded monthly
		6.0% compounded daily

Which of the following statements is most correct?

		Sole proprietorships are not subject to any regulations.
		In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.
		Sole proprietorships and partnerships generally have a tax advantage over many corporations, especially large ones.
		S corporation is generally subject to the corporate income tax.