Q1. Identify the key financial decisions facing the financial manager of any business firm and Explain the meaning of each decision? (1 mark)

Q2. What can happen if a firm is poorly managed? (1 mark)

Q3. If the expected inflation rate is 10 percent and the real rate of interest is 4 percent:

1. Compute the nominal rate of interest. (Hint: use equation 2.1) (0.5 mark)
2. Briefly differentiate between the nominal and the real rates of interest. (0.5 mark)