1.The equilibrium risk-return curve for a risk-averse investor is

A.negatively sloped.

B.horizontal.

C.vertical.

2.The implicit rent of a house is

A.always zero for its owner.

B.the property tax and insurance costs for the house.

C.the interest rate on the mortgage loan on the house plus the amount of depreciation on the house

3.Which of the following is a common way for shareholders to prevent moral hazard of managers?

A.Increase the number of managers.

B.Limit the amount of information that managers can receive.

C.Share profits with managers.