CSC1 Exam Dumps : Canadian Securities Course Exam 1

Preferred shares provide investors withpriority to receive fixed dividends ahead of common shareholders. This fixed income feature makes preferred shares similar to debt instruments but with characteristics of equity. While preferred shareholders have no guaranteed dividend payment (subject to the company’s discretion and profitability), they are entitled to receive dividends before any distribution to common shareholders.

Preferred shares do not have a higher potential for capital appreciation compared to common shares, as they are typically designed for income rather than growth. Additionally, preferred shareholders have a lower claim on assets compared to debt holders.

When a dealer member fills a client’s order for an unlisted security from its own inventory, the dealer is acting as aprincipal.

A (Alternative trading system)refers to electronic platforms for trading securities.

B (Clearing agent)involves post-trade settlement activities.

C (Over-the-counter agent)is incorrect since the dealer is transacting directly.

References:Volume 1, Chapter 9 ("Principal and Agency Transactions")​.

Theright of rescissionallows a purchaser to cancel their purchase if the prospectus contains amisrepresentation. This statutory right protects investors by ensuring that they are not bound by transactions based on incorrect or misleading information. Under Canadian securities law, the right of rescission is an important safeguard to maintain market integrity and investor confidence.

This right is distinct from theright of action for damages, which allows investors to sue for compensation, and theright of withdrawal, which permits cancellation within a limited time after agreeing to the purchase, typically two business days.

References:

Volume 1, Chapter 3:The Canadian Regulatory Environment, section on "Rights of Purchasers" describes the statutory rights related to prospectuses and their misrepresentations​.