Question: Question 1 (30 points) a) Which one of the functions of the financial system is the most important? Explain why that function is the most

Question 1 (30 points) a) Which one of the functions of the financial system is the most important? Explain why that function is the most important one. b) It is well known that the separation of ownership and control causes agency problems. If that is the case, why do owners of some companies delegate the authority to manage the company to professional managers rather than managing the company by themselves to avoid agency costs?

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