1. Explain why the notes to a firm's financial statements are an integral part of the company. What kind of information is in this section? Why should an average investor be sure to read them?
2. Does paying an executive $1 per year but giving them stock options create an agency issue? Why or why not?
3. Distinguish between each of the following pairs. What exactly makes them different? Why? Note: Do not cut and past your reply from the internet or the text or you will not receive credit. I am interested in your own opinion.
- Spot market and futures market
- Option contract and futures contract
- Primary market and secondary market
4. Can ethics be legislated? What about SOX? If it follows all applicable rules and regulations is a company ethical?