Canadian Securities Course (CSC) Practice Exam

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What does the term "Investments in Associates" refer to in the context of finance?

Maximum number of shares a corporation may issue
The degree of ownership a company has in another
Authorized shares that have been sold by a corporation
The right to cancel a purchase if the prospectus has a mistake

The correct answer is: The degree of ownership a company has in another

Investments in associates refer to the degree of ownership a company has in another. This means that the company has a significant influence over the associate's operations and financial decisions. The other options are incorrect as they do not accurately describe what the term refers to. Option A refers to the maximum number of shares a corporation can issue, which is known as the authorized shares. Option C refers to the portion of authorized shares that have been sold, also known as the issued shares. Option D refers to the right to cancel a purchase if there is a mistake in the prospectus, which is known as the cooling-off right. None of these options are related to investments in associates.