4. A(n) would be an example of a principal, while a(n) would be an example of an agent.

a) shareholder; manager

b) manager; owner

c) accountant; bondholder

d) shareholder; bondholder

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5. The market price of a share of common stock is determined by:

a) the board of directors of the firm.

b) the stock exchange on which the stock is listed.

c) the president of the company.

d) individuals buying and selling the stock.

6. The focal point of financial management in a firm is:

a) the number and types of products or services provided by the firm.

b) the minimization of the amount of taxes paid by the firm.

c) the creation of value for shareholders.

d) the dollars profits earned by the firm.