1. One reason for the existence of agency problems between managers and stockholders is that:

A) there is a significant degree of separation between management and ownership.

B) managers know how to manage the firm better than stockholders.

C) stockholders have unreasonable expectations about managerial performance.

D) none of the above.

2. Over the period of 1926 to 2014, the average rate of inflation was _____ percent.

a. 2.0

b. 2.7

c. 3.0

d. 3.8

e. 4.3