Canadian Securities Course (CSC) Practice Exam

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Study for the Canadian Securities Course Exam with our comprehensive practice test. Explore flashcards and multiple-choice questions, each with detailed hints and explanations. Prepare for your CSC exam with confidence!

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Which statement accurately describes the role of escrowing shares?

Guarantees immediate profit for shareholders
Allows shareholders to freely sell shares without restriction
Protects the value of shares until a market develops
Increases the voting power of shareholders

The correct answer is: Protects the value of shares until a market develops

Escrowing shares involves holding them in an account until a predetermined event or condition is met. This can help protect the value of shares by ensuring that they are not oversupplied in the market, which could decrease their value. Option A is incorrect because escrowing shares does not guarantee immediate profit for shareholders. Option B is incorrect because escrowing shares typically restricts their sale until a certain time or condition is met. Option D is incorrect because escrowing shares does not necessarily impact the voting power of shareholders.