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PLEASE answer all! "(TRUE or FALSE?) When the financial decisions are consistent with the best interests of the stockholders, then there is a violation of the agent-principal relationship and an agency problem exists. O FALSE O TRUE (TRUE or FALSE?) An agency problem occurs if managers who are afraid of losing their jobs reject a promising but somewhat risky project even though the project is likely to benefit the firm's owners. O TRUE FALSE (TRUE or FALSE?) An insurance company known as AIG collected fees and sold limited numbers of credit default swaps, was able to pay off its obligations and made profits during the 2008 financial crisis. FALSE TRUE (TRUE or FALSE?) Any event or financial decision that increases the risk associated with receipt of expected cash flows reduces stock price. O FALSE O TRUE (TRUE or FALSE?) Before the 2008 financial crisis, high risk mortgage-backed securities which included sub- prime mortgages had been given very high ratings by the rating firms such as Moody's, Standard and Poor's, and Fitch. O TRUE O FALSE (TRUE or FALSE?) Cash inflows expected sooner result in a lower stock price. FALSE O TRUE (TRUE or FALSE?) Closely held corporations are private and the shares of these firms are not traded on organized exchanges nor on an organized over the counter market such as Nasdaq. FALSE O TRUE (TRUE or FALSE?) Company value does not depend on future cash flows, their timing, and their riskiness. FALSE O TRUE (TRUE or FALSE?) Corporations are legal entities separate from their owners unlike proprietorships and partnerships. O FALSE O TRUE (TRUE or FALSE?) Corporations cannot be taxed as separate legal entities and cannot pay their own income tax just as if they were individuals. O FALSE O TRUE

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