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A relative with has just started to invest in the stock market asks you about preemptive rights. They tell you they came across the term

A relative with has just started to invest in the stock market asks you about "preemptive rights". They tell you they came across the term while doing some research on the stock market but do not understand what it is. Explain to your relative what preemptive rights are and why they are important. Make sure you include examples

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