Q13-What does risk shifting" imply? (5 pts.) 1. When faced with bankruptcy, managers invest in low risk projects to conserve capital. 2. When faced with bankruptcy, managers tend to invest in high-risk, high-return projects. 3. When faced with bankruptcy, managers do not invest more equity capital. 4. When faced with bankruptcy, managers may make accounting changes to conceal the true extent of the problem. Q14-Inclusion of restrictions in a bond contract leads to (5 pts.) 1. higher interest costs. 2. lower agency costs. 3. higher bankruptcy costs. 4. higher agency costs