Question: 1. (True/False. Explain) A consumer will require compensation for deferring her/his consumption. 2. (True/False. Explain) The more free cash flow (FCF) a firm generates, the

1. (True/False. Explain) A consumer will require compensation for deferring her/his consumption.

2. (True/False. Explain) The more free cash flow (FCF) a firm generates, the higher the agency problem is.

3. If you are facing a choice between a federal bond and a municipal offering same yields and risks, which one would you choose? Why?

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