The effective annual rate (EAR) for a savings account with a stated APR of 4% compounded daily (use 365 day year) is closest to: Select one: a. 4.00% b. 14.60% C. 4.08% d. 3.92% 10. The relationship between shareholders and management is called: Select one: a. an agency relationship b. a proxy relationship c. a managerial relationship d. both an agency relationship and an agency problem Which of the following statements is FALSE? Select one: O a. An inverted yield curve is often interpreted as a positive forecast for economic growth. o b. All the formulas for computing present values of annuities and perpetuities are based upon discounting all of the cash flows at the same rate. c. An inverted yield curve generally signals an expected decline in future interest rates. O d. The rate of growth of your purchasing power is determined by the real interest rate. 15. Which of the following is not part of the investment decision? Select one: a. what fixed assets to invest in b. what working capital investments to undertake c. how to finance the investments d. what projects to undertake In a corporation, the ultimate decisions regarding business matters are made by: Select one: a. debt holders. b. investors. c. the Board of Directors. d. shareholders. The effective annual rate is defined as the interest rate that is: Select one: a. compounded at regular intervals throughout the year. b. equal to a monthly rate multiplied by twelve. C. expressed as if it were compounded once per year. d. computed by multiplying the rate per period by the number of periods per year. Which of the following statements is FALSE? Select one: a. The annual percentage rate indicates the amount of simple interest earned in one year. b. The effective annual rate indicates the amount of interest that will be earned at the end of one year. c. Because interest rates may be quoted for different time intervals, it is often necessary to adjust the interest rate to a time period that matches that of our cash flows. d. The annual percentage rate indicates the amount of interest including the effect of compounding. Which of the following statements is FALSE? Select one: a. An inverted yield curve is often interpreted as a positive forecast for economic growth. b. All the formulas for computing present values of annuities and perpetuities are based upon discounting all of the cash flows at the same rate. c. An inverted yield curve generally signals an expected decline in future interest rates. O d. The rate of growth of your purchasing power is determined by the real interest rate. O The effective annual rate (EAR) for a loan with a stated APR of 10% compounded quarterly is closest to: Select one: a. 10.38% b. 10.00% c. 9.65% O d. 12.50%