CSC1 Exam Dumps : Canadian Securities Course Exam 1

A stock split reduces the price per share, making the shares more affordable to smaller or retail investors. This does not increase the market capitalization or shareholder value but makes trading easier by improving liquidity and accessibility.

References:

Volume 1, Chapter 8:Equity Securities, section on "Stock Splits and Consolidations," describes the purpose and benefits of stock splits for investors, particularly in terms of affordability and liquidity​.

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​.

Warrants are securities issued by a company to existing shareholders, giving them the right to purchase additional shares at a predetermined price, often over a longer period (years). Warrants are typically used as an incentive or as part of financing arrangements.

This differs from rights, which are similar but usually have a shorter exercise period, often weeks.

Study Document References:

Volume 1, Chapter 8:Warrants and Rights, discussing their features and purposes​​.