Which of the Following Statements Is TRUE Regarding the Disposal

question 7

Multiple Choice

Which of the following statements is TRUE regarding the disposal of shares by a shareholder?

• A) The sale of shares to other shareholders is known as a 'buy-back'.
• B) The sale of shares to the corporate treasury is not allowed in the Income Tax Act.
• C) The sale of shares to the corporate treasury may result in a deemed dividend and a capital gain or loss to the shareholder.
• D) When a shareholder sells shares to other shareholders, the corporation's capital base increases.

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Definitions:

Monetary Policy

The process by which a central bank controls the supply of money in the economy, primarily through interest rates.

Federal Reserve District Banks

The 12 regional banks in the Federal Reserve System, each serving a specific geographic area of the United States, responsible for implementing the country's monetary policies.

Recessions

A phase of limited economic decrease, with trade and industry activity lowering, usually identified by a decrease in GDP in two adjacent quarters.

Federal Reserve Notes

Paper money issued by the Federal Reserve, the central banking system of the United States, used as the country's standard currency.