1. All of the following are benefits of owning equity in a firm, except:
   1. Your potential upside is unlimited
   2. You get a say in how the firm is run
   3. You are first in line to get paid in bankruptcy
   4. Your expected return is typically higher than that on debt
2. Principal-agent conflicts are the result of
   1. Actively managed portfolios rarely outperforming passively managed ones
   2. Managers and owners having different incentives
   3. Weak form market efficiency
   4. Risk aversion
3. The main benefit of municipal bonds is:
   1. Their coupons are not generally taxable
   2. They are backed by the full faith and credit of the US government
   3. High liquidity
   4. They are protected against inflation
4. Stock exchanges are generally:
   1. Dealer markets
   2. Direct search markets
   3. Auction markets
   4. Brokered markets
5. All else being equal, if the rate of inflation increases, it will decrease:
   1. The real rate of return
   2. The riskless rate of return
   3. The nominal rate of return
   4. The market price of risk