1. Explain why international business is exposed to agency problems, the ways to reduce the potential agency problems.

2. The main responsibility of a financial manager is to

A- manage the wealth of stockholders.

B- assist the marketing department in making sales projections.

C- make decisions that are in the best interests of the firm’s owners.

D- keep the firm’s debt-holders happy.

3. Which of the following is not an example of frivolous agency costs?

A. Excessive perks

B. Hiring external auditors to certify accounting statements despite having internal auditors

C. The use of expensive corporate jets for directors’ trips

D. Expensive champagne served at board meetings