Canadian Securities Course (CSC) Level 1 Practice Exam

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Describe escrowed shares.

Shares that are freely traded on the secondary market.
Shares held by the company's executives for future allocation.
Shares held by the underwriter for a specified period of time.
Shares held by shareholders subject to certain conditions before being released.

The correct answer is: Shares held by shareholders subject to certain conditions before being released.

Escrowed shares are shares held by shareholders subject to certain conditions before being released. These conditions could include restrictions on trading or transferring the shares for a specific period of time. Escrowed shares are not freely traded on the secondary market (Option A), held by the company's executives for future allocation (Option B), or held by the underwriter for a specified period of time (Option C).