Canadian Securities Course (CSC) Level 1 Practice Exam

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What is the purpose of a greensheet?

To provide detailed information on investor returns
To outline the competitors of the issuing company
To highlight key features and risks of a new issue
To disclose insider trading activities

The correct answer is: To highlight key features and risks of a new issue

The purpose of a greensheet is to highlight key features and risks of a new issue. Greensheets are important documents that provide potential investors with crucial information about a new securities offering. They typically outline details such as the issuer's business operations, financial position, use of proceeds from the offering, and the risks associated with investing in the new issue. This information helps investors make informed decisions about whether to invest in the new security. Options A, B, and D are incorrect because they do not accurately reflect the main purpose of a greensheet. Greensheets focus on providing information about the new issue itself, rather than investor returns, competitors of the issuing company, or insider trading activities.