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633 ER 2018e GNMENT 1 (GROUP ASSIGNMENT) 7. In a corporation, the ultimate decisions regarding business matters are made by a the Board of Directors. b. debt holders. c. shareholders d. investors 8. The person charged with running the corporation by instituting the rules and policies set by the board of directors is called: a. the chief operating officer. b. the company president C. the chief executive officer. d the chief financial officer. 9. The Principal-Agent Problem arises: a. because managers have little incentive to work in the interest of shareholders when this means working against their own self-interest. b. because of the separation of ownership and control in a corporation. c. Both A and B d. None of the above 10.If shareholders are unhappy with a CEO's performance, they are most likely to a. buy more shares in an effort to gain control of the firm. b. file a shareholder resolution. c replace the CEO through a grassroots shareholder uprising d. sell their shares. II.An agency problem can be alleviated by: a. requiring all firms to be sole proprietorships b. compensating managers in such a way that acting in the best interest of shareholders is also in the best interest of managers. c. asking managers to take on more risk than they are comfortable taking. d. A and B