Economics questions:

1.Explain how there could be a conflict between the interests of directors and

shareholders over the raising of additional finance, where the directors would preferthe company to issue equity and the shareholders would prefer the company toborrow. [5marks]

2. Explain why accounting information that is relevant may not be reliable and whyaccounting information that is reliable may not be relevant. [5marks]

3. Discuss the usefulness and limitations of a company's annual report to the company'slenders. [5marks]

4.

You have been asked to advise a sports magazine, as a consultant statistician. You have been asked to investigate the hypothesis that football managers in the Italian "Serie A", are dismissed more quickly than those in the English premier league. Each league has twenty teams, each with one manager. During the season the following events happened (at the end of the months indicated) to the twenty managers who started: Month Italy England 1 One dismissed One died 3 One left of his own accord 5 One left of his own accord One dismissed 6 Two dismissed One left of her own accord 8 One died Two dismissed 11 Two dismissed One dismissed Hence there were thirteen of the original twenty managers still employed by the same club at the end of the season, for each of the two leagues. (i) Calculate the Kaplan-Meier estimate of the distribution function and its approximate variance for each league separately. [ot] (ii) Comment on the hypothesis that Italian managers are dismissed more quickly than those in England. [2] [Total 12]