Canadian Securities Course (CSC) Practice Exam

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What is the purpose of a "Prospectus" in the context of securities offerings?

To provide exclusive information to institutional investors
To outline the history of the company
To contain full disclosure of material facts related to the securities offered
To highlight past stock prices

The correct answer is: To contain full disclosure of material facts related to the securities offered

A prospectus is a document that is required to be provided to potential investors when a company is offering securities for sale. It contains important information related to the securities being offered, such as the company's financial information, risk factors, and the terms and conditions of the securities. It is not intended to provide exclusive information to institutional investors (option A), but rather to provide equal and full disclosure to all potential investors. Outlining the history of the company (option B) may be included in the prospectus, but it is not the main purpose of the document. Similarly, highlighting past stock prices (option D) is not the purpose of a prospectus and may not be included in the document at all. Therefore, the correct answer is C.