1. The problem of preventing managers from acting in their own best interests and instead acting in the best interests of the stockholders is the _______?
Agency Problem
Business environment problem
Stockholder problem
Principle Problem
2. According to the efficient market hypothesis, which one of the following is NOT correct:
Markets place a premium on the future
Today’s stock price is the best predictor of tomorrow’s stock price
Stock prices reflect all available information
Today’s stock price incorporates the past history of prices
And please explain WHY.