1. When the interests of the shareholders and of the management of a firm are not aligned, this is called _____.
a. an owner-debt holder conflict
b. a free cash flow conflict
c. an agency conflict
d. a disruptive conflict
2. A bank currently offers an investment account with a yearly interest rate of 6% compounded monthly. It wants to offer customers a second account with interest compounded quarterly. If the bank wants the EAR to be 0.5 percentage points higher, what APR should it quote for the second account?
A. 6.468% B. 6.507% C. 6.522% D. 6.591%