Canadian Securities Course (CSC) Practice Exam

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What does the "Right to action for damages" entail if a prospectus has a material misrepresentation?

A distribution method used by the Bank of Canada for new issues of bonds
A method for government securities distribution
An opportunity for primary distributors to request bonds at an average price
The right to seek damages for misrepresentations in the prospectus

The correct answer is: The right to seek damages for misrepresentations in the prospectus

The other options are incorrect because they do not pertain to the "Right to action for damages" in regard to a prospectus with material misrepresentation. Option A refers to the distribution method for new bond issues by the Bank of Canada. Option B refers to the distribution of government securities. Option C refers to the opportunity for primary distributors to request bonds at an average price. Therefore, they are all unrelated to the specific scenario mentioned in the question. Option D, on the other hand, correctly states that the "Right to action for damages" allows individuals to seek compensation for any misrepresentations found in the prospectus. It is the only option that directly addresses the given question.