Canadian Securities Course (CSC) Level 1 Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Canadian Securities Course Level 1 Exam with our comprehensive study tool. Use flashcards and multiple choice questions to hone your skills. Fully understand each topic with hints and explanations. Get ready to excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

List and explain the 3 types of after-market stabilization activities.

Right of first refusal, Stamp duty, Offering circular.
Greenshoe option, Underpricing penalty, release letters.
Penalty bid, Stabilizing bid, Rights offering.
Restrictive covenant, Liquidity ratio, Financial leverage.

The correct answer is: Penalty bid, Stabilizing bid, Rights offering.

The correct answer is C. Penalty bid, Stabilizing bid, Rights offering. Penalty bid refers to a provision in an underwriting agreement that allows the underwriter to reclaim a selling concession from a syndicate member who fails to sell the issue within a certain time frame. Stabilizing bid involves the underwriter entering the open market to purchase shares of the newly issued security in order to maintain its price and prevent it from falling below the offering price. Rights offering is a way for companies to raise capital by offering existing shareholders the right to purchase additional shares at a discounted price, usually in proportion to their existing holdings. Options A (Right of first refusal, Stamp duty, Offering circular) and D (Restrictive covenant, Liquidity ratio, Financial leverage) do not represent the types of after-market stabilization activities.