Which Statement About "Share Buy-Back" Is Correct

question 7

Multiple Choice

Which statement about "share buy-back" is correct?

• A)If the repurchase price if below the issue price,an accounting "gain" results.
• B)If the repurchase price if below the issue price,the difference goes to "common shares."
• C)If the repurchase price if below the issue price,the difference goes to "contributed surplus."
• D)If the repurchase price if below the issue price,an accounting "loss" results.

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Definitions:

Market Efficiency

The degree to which stock prices reflect all available, relevant information, making it impossible to consistently achieve higher returns.

Superior Returns

Financial returns that exceed those of a benchmark or average over the same period.

Frequent Trading

Frequent trading involves actively buying and selling securities, often several times within a single trading session, to capitalize on short-term market movements.

Inferior Returns

Returns on an investment that are lower than the benchmark or expected returns, often indicating underperformance.