Canadian Securities Course (CSC) Level 1 Practice Exam

What actions may rights holders take?

1. Exercise some or all of the rights and acquire the shares.

2. Sell some or all of the rights.

3. Buy additional rights to trade or exercise later.

4. Do nothing and let the rights expire worthless.

The correct answer is: Exercise some or all of the rights and acquire the shares.

Rights holders may take action by exercising some or all of the rights they hold, which allows them to acquire the shares at a set price. This is a key benefit of being a rights holder as it gives them the option to convert their rights into shares. Selling some or all of the rights, buying additional rights to trade or exercise later, and doing nothing and letting the rights expire worthless are not actions that rights holders may typically take.