9. Which of the following statement(s) is/are false? 1. Principal-agency conflict relationship exists in every corporation as long as the stockholders and managers are different parties. Il Since managers are hired to work for shareholders, there isn't any conflict between stockholders and managers. III. Paying variable compensation packages such as in stocks or options can reduce stockholders vs. managers conflicts. a. I only d. I and III only b. II only e. None of the above choices c. III only 10. Which of the following statements is CORRECT? a. Hedge funds have more in common with investment banks than with any other type of financial institution. b. Hedge funds have more in common with commercial banks than with any other type of financial institution. c. Hedge funds are not as highly regulated as most other types of financial institutions. The justification for this light regulation is that only "sophisticated investors" (i.e., those with high net worths and high incomes) are permitted to invest in these funds, and these investors supposedly can do any necessary "due diligence" on their own rather than have it done by the SEC or some other regulator. d. Hedge funds are legal in Europe and Asia, but they are not permitted to operate in the United States e. Hedge funds are legal in the United States, but they are not permitted to operate in Europe or Asia, 11. Which of the following statement(s) is/are true? 1. Statement of cash flows reports the impact of a firm's activities on cash flows over a given period of time. II. Income statement provides a snap-shot of a firm's outstanding revenues and expenses at the end of the year. III. The Cost of goods sold can be found on a firm's balance sheet under current liabilities. a. I only d. I and III only b. II only e. None of the above choices c. III only 12. Which of the following statement(s) is/are false? 1. Google issues $10 million of common stock in an IPO is an example of a primary transaction II. Google stock is a capital security. III. IBM sells $10 million of GM common stock is an example of a primary transaction since du companies (IBM & GM) are huge. a. I only d. I and III only b. II only e. None of the above choices c. III only