Preliminary Pricing Supplement
(To the Prospectus, the Prospectus Supplement and the Product Prospectus Supplement, each dated December 20, 2023)
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Filed Pursuant to Rule 424(b)(2)
Registration No. 333-275898
May 7, 2024
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Royal Bank of Canada
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$
Buffered Phoenix Autocallable Notes with Memory Coupon Due May 29, 2025
Linked to the Common Stock of Eli Lilly and Company
Senior Global Medium-Term Notes, Series J
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Key Terms
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Terms used in this preliminary pricing supplement, but not defined herein, will have the meanings ascribed to them in the product prospectus supplement.
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Issuer:
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Royal Bank of Canada (“Bank”)
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Reference Stock:
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The common stock of Eli Lilly and Company (Bloomberg symbol: “LLY”)
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Observation Dates:
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August 23, 2024, November 22, 2024, February 21, 2025 and May 23, 2025(a)(b)
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Coupon Payment
Dates:
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Three business days following each Observation Date, except that the final Coupon Payment Date will be the maturity date.
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Contingent Coupons
and Memory Feature:
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The Contingent Coupon will be paid on each Coupon Payment Date if the closing price of the Reference Stock on the applicable Observation Date is at or above the Coupon Barrier. If the
Contingent Coupon is not payable on any Coupon Payment Date, it will be paid on any later Coupon Payment Date (or at maturity) on which the Contingent Coupon is payable, together with the payment otherwise due on that later date. For the
avoidance of doubt, once a previously unpaid Contingent Coupon has been paid on a later Coupon Payment Date, it will not be paid again on a subsequent date.
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Contingent Coupon:
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$32.45 per $1,000 in principal amount of the Notes, if payable.
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Coupon Barrier and
Buffer Price:
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85% of the Initial Stock Price. The Coupon Barrier and Buffer Price are subject to the adjustment provisions set forth in the product prospectus supplement.
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Call Feature:
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If the closing price of the Reference Stock on any Observation Date (other than the final Observation Date) is at or above the Initial Stock Price, the Notes will be automatically called for a
cash payment equal to the principal amount plus the applicable Contingent Coupon for the applicable Observation Date, together with any previously unpaid Contingent Coupons.
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Call Settlement Dates:
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If the Notes are called on an Observation Date, the Call Settlement Date will be the Coupon Payment Date corresponding to that Observation Date.
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Buffer Percentage:
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15%
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Downside Multiplier:
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100/85, which is approximately 1.17647.
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Payment at Maturity:
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If the Notes are not called and on the final Observation Date:
• the Final Stock Price is at or
above the Buffer Price, then you will receive a cash amount equal to the principal amount plus the Contingent Coupon otherwise due on the maturity date and any previously unpaid Contingent Coupons with respect to the prior Coupon Payment
Dates; or
• the Final Stock Price is below
the Buffer Price, then you will receive a cash amount equal to:
Principal amount x [1 + ((Percentage Change + Buffer Percentage) x Downside Multiplier)].
In this case, you will incur a loss of approximately 1.17647% of the principal amount for each 1% that the Final Stock Price is less
than the Buffer Price, and you will lose some or all of your initial investment.
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Percentage Change:
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Final Stock Price – Initial Stock Price
Initial Stock Price
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Initial Stock Price:
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The closing price of the Reference Stock on the Trade Date.
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Final Stock Price:
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The closing price of the Reference Stock on the Valuation Date.
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Valuation Date:
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May 23, 2025(a)(b)
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Maturity Date:
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May 29, 2025(a)(b)
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CUSIP/ISIN:
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78017FYN7 / US78017FYN76
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Calculation Agent:
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RBC Capital Markets, LLC (“RBCCM”)
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Estimated Value:
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The initial estimated value of the Notes as of the Trade Date is expected to be between $933.40 and $983.40 per $1,000 in principal amount, and will be less than the price to public. The final
pricing supplement relating to the Notes will set forth our estimate of the initial value of the Notes as of the Trade Date. The actual value of the Notes at any time will reflect many factors, cannot be predicted with accuracy, and may be
less than this amount.
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Price to Public1
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Underwriting Commission2
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Proceeds to Royal Bank of Canada
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Per Note
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$1,000.00
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$10.00
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$990.00
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Total
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$
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$
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$
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RBC Capital Markets, LLC
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JPMorgan Chase Bank, N.A.
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J.P. Morgan Securities LLC
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Placement Agents
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Observation Dates Prior to the Final Observation Date
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Final Observation Date
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||||||
Reference
Stock Price
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Percentage
Change in the
Prices of the
Reference Stock
at Observation
Date
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Payment on
Coupon Payment
Date or Call
Settlement Date (as
applicable)(1)(2)
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Return on the
Notes
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Final Stock Price
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Percentage
Change at Final
Observation
Date
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Payment at Maturity(2)
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Return on the Notes(3)
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$180.00
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80.00%
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$1,032.45
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3.245%
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$180.00
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80.00%
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$1,032.45
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3.245%
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$170.00
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70.00%
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$1,032.45
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3.245%
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$170.00
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70.00%
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$1,032.45
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3.245%
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$160.00
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60.00%
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$1,032.45
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3.245%
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$160.00
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60.00%
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$1,032.45
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3.245%
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$150.00
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50.00%
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$1,032.45
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3.245%
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$150.00
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50.00%
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$1,032.45
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3.245%
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$140.00
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40.00%
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$1,032.45
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3.245%
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$140.00
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40.00%
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$1,032.45
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3.245%
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$130.00
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30.00%
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$1,032.45
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3.245%
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$130.00
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30.00%
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$1,032.45
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3.245%
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$120.00
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20.00%
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$1,032.45
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3.245%
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$120.00
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20.00%
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$1,032.45
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3.245%
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$110.00
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10.00%
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$1,032.45
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3.245%
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$110.00
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10.00%
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$1,032.45
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3.245%
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$105.00
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5.00%
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$1,032.45
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3.245%
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$105.00
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5.00%
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$1,032.45
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3.245%
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$100.00
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0.00%
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$1,032.45
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3.245%
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$100.00
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0.00%
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$1,032.45
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3.245%
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$90.00
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-10.00%
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$32.45
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3.245%
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$90.00
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-10.00%
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$1,032.45
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3.245%
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$85.00
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-15.00%
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$32.45
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3.245%
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$85.00
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-15.00%
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$1,032.45
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3.245%
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$80.00
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-20.00%
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$0.00
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0.00%
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$80.00
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-20.00%
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$941.18
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-5.88%
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$70.00
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-30.00%
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$0.00
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0.00%
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$70.00
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-30.00%
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$823.53
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-17.65%
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$60.00
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-40.00%
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$0.00
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0.00%
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$60.00
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-40.00%
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$705.88
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-29.41%
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$50.00
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-50.00%
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$0.00
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0.00%
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$50.00
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-50.00%
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$588.24
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-41.18%
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$40.00
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-60.00%
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$0.00
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0.00%
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$40.00
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-60.00%
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$470.59
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-52.94%
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$30.00
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-70.00%
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$0.00
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0.00%
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$30.00
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-70.00%
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$352.94
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-64.71%
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$20.00
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-80.00%
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$0.00
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0.00%
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$20.00
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-80.00%
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$235.29
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-76.47%
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$10.00
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-90.00%
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$0.00
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0.00%
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$10.00
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-90.00%
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$117.65
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-88.24%
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$0.00
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-100.00%
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$0.00
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0.00%
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$0.00
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-100.00%
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$0.00
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-100.00%
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• |
Capped Appreciation Potential — The return potential of the Notes is limited to the Contingent Coupons and you will not participate in any appreciation in the price of the
Reference Stock, which may be significant.
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Potential Early Redemption as a Result of Automatic Call Feature — While the original term of the Notes is approximately one year, the Notes will be called before maturity
if the closing price of the Reference Stock is at or above the Initial Stock Price on the applicable Observation Date (other than the final Observation Date). In such a case, you will receive the principal amount plus the applicable
Contingent Coupon corresponding to that Observation Date, plus any previously unpaid Contingent Coupons with respect to prior Observation Dates.
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Contingent Protection Against Loss — If the Notes are not automatically called and the Final Stock Price is at or above the Buffer Price, you will be entitled to receive
the full principal amount of your Notes at maturity (plus the applicable Contingent Coupon and any previously unpaid Contingent Coupons with respect to prior Observation Dates). If the Notes are not automatically called and the Final Stock
Price is less than the Buffer Price, you will lose approximately 1.17647% of the principal amount of your Notes for every 1% that the Final Stock Price is less than the Buffer Price. Under these circumstances, you may lose up to your entire
principal amount.
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You May Lose All or a Portion of the Principal Amount at Maturity — Investors in the Notes could lose all or a substantial portion of their principal amount if there is a
decline in the Reference Stock below the Buffer Price and the Notes are not automatically called. You will lose approximately 1.17647% of the principal amount of the Notes for each 1% that the Final Stock Price is less than the Buffer
Price.
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The Contingent Repayment of Principal Applies Only at Maturity — You should be willing to hold your Notes to maturity. If you sell your Notes prior to maturity in the
secondary market, if any, you may have to sell your Notes at a loss relative to your initial investment even if the price of the Reference Stock is above the Buffer Price.
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You May Not Receive Any Contingent Coupons — Investors in the Notes will not necessarily receive Contingent Coupons on the Notes. If the closing price of the Reference
Stock on an Observation Date is less than the Coupon Barrier, investors will not receive the Contingent Coupon applicable to that Observation Date. If the closing price of the Reference Stock is less than the Coupon Barrier on each of the
Observation Dates, investors will not receive any Contingent Coupons during the term of the Notes, and will not receive a positive return on the Notes. Contingent Coupon payments should not be viewed as periodic interest payments.
Generally, this non-payment of the Contingent Coupon coincides with a period of greater risk of principal loss on the Notes. Notwithstanding the memory feature described above, there can be no assurance that any unpaid Contingent Coupon
will become payable during the term of the Notes.
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Your Return May Be Lower than the Return on a Conventional Debt Security of Comparable Maturity — The return that you will receive on the Notes, which could be negative,
may be less than the return you could earn on other investments. Even if your return is positive, your return may be less than the return you would earn if you bought one of our conventional senior interest bearing debt securities.
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The Notes Are Subject to Reinvestment Risk if the Notes Are Called — If your Notes are automatically called, the term of the Notes may be as short as approximately three
months. There is no guarantee that you would be able to reinvest the proceeds from an investment in the Notes at a comparable return for a similar level of risk if the Notes are automatically called prior to the maturity date. In addition,
for the avoidance of doubt, the fees and commissions described in this document will not be rebated or subject to amortization if the Notes are called.
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The Payments on the Notes Are Subject to the Credit Risk of the Issuer — The Notes are our senior unsecured debt securities. As a result, all payments on the Notes are
dependent upon our ability to repay our obligations at that time. This will be the case even if the price of the Reference Stock increases after the Trade Date. No assurance can be given as to what our financial condition will be on any
payment date.
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Owning the Notes Is Not the Same as Owning the Reference Stock — The return on your Notes may not reflect the return you would realize if you actually owned the Reference
Stock. For instance, as a holder of the Notes, you will not have voting rights, rights to receive cash dividends or other distributions, or any other rights that holders of the Reference Stock would have. Further, you will not participate
in any appreciation of the Reference Stock, which could be significant.
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The Payments on the Notes Are Subject to Postponement Due to Market Disruption Events and Other Adjustments — Whether the Notes will be called prior to maturity, the
payment upon an automatic call or at maturity, the Observation Dates, the Valuation Date and the Reference Stock are subject to adjustment as described in the product prospectus supplement and this preliminary pricing supplement. For a
description of what constitutes a market disruption event as well as the consequences of that market disruption event and the unavailability of the price of the Reference Stock on an Observation Date or the Valuation Date, see “General
Terms of the Notes—Payment at Maturity” and “—Market Disruption Events” in the product prospectus supplement.
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The Tax Treatment of the Notes Is Uncertain — Significant aspects of the tax treatment of an investment in the Notes are uncertain. You should consult your tax adviser
about your tax situation.
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The Initial Estimated Value of the Notes Will Be Less than the Price to the Public — The initial estimated value that will be set forth on the cover page of the final
pricing supplement for the Notes will not represent a minimum price at which we, RBCCM or any of our affiliates would be willing to purchase the Notes in any secondary market (if any exists) at any time. If you attempt to sell the Notes
prior to maturity, their market value may be lower than the price you paid for them and the initial estimated value. This is due to, among other things, changes in the price of the Reference Stock, the borrowing rate we pay to issue
securities of this kind, and the inclusion in the price to the public of the underwriting discount and the costs relating to our hedging of the Notes. These factors, together with various credit, market and economic factors over the term of
the Notes, are expected to reduce the price at which you may be able to sell the Notes in any secondary market and will affect the value of the Notes in complex and unpredictable ways. Assuming no change in market conditions or any other
relevant factors, the price, if any, at which you may be able to sell your Notes prior to maturity may be less than your original purchase price. The Notes are not designed to be short-term trading instruments. Accordingly, you should be
able and willing to hold your Notes to maturity.
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The Initial Estimated Value of the Notes That We Will Provide in the Final Pricing Supplement Will Be an Estimate Only, Calculated as of the Trade Date — The value of the
Notes at any time after the Trade Date will vary based on many factors, including changes in market conditions, and cannot be predicted with accuracy. As a result, the actual value you would receive if you sold the Notes in any secondary
market, if any, should be expected to differ materially from the initial estimated value of your Notes.
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There May Not Be an Active Trading Market for the Notes—Sales in the Secondary Market May Result in Significant Losses — There may be little or no secondary market for the
Notes. The Notes will not be listed on any securities exchange. RBCCM and our other affiliates may make a market for the Notes; however, they are not required to do so. RBCCM or any of our other affiliates may stop any market-making
activities at any time. Even if a secondary market for the Notes develops, it may not provide significant liquidity or trade at prices advantageous to you. We expect that transaction costs in any secondary market would be high. As a result,
the difference between bid and ask prices for the Notes in any secondary market could be substantial.
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Many Economic and Market Factors Will Impact the Value of the Notes — In addition to the price of the Reference Stock on any day, the value of the Notes will be affected by
a number of economic and market factors that may either offset or magnify each other, including:
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the expected volatility of the Reference Stock;
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the time to maturity of the Notes;
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the dividend rate on the Reference Stock;
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interest and yield rates in the market generally;
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a variety of economic, financial, political, regulatory or judicial events; and
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our creditworthiness, including actual or anticipated downgrades in our credit ratings.
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There Is No Affiliation Between Us and the Issuer of the Reference Stock, and We Are Not Responsible for any Disclosure by that Company — We are not affiliated with the
issuer of the Reference Stock. However, we and our affiliates may currently, or from time to time in the future engage in business with the issuer of the Reference Stock. Nevertheless, neither we nor our affiliates assume any
responsibilities for the accuracy or the completeness of any information about the Reference Stock that the issuer of the Reference Stock prepares. You, as an investor in the Notes, should make your own investigation into the Reference
Stock and the issuer of the Reference Stock. The issuer of the Reference Stock is not involved in this offering and has no obligation of any sort with respect to your Notes. The issuer of the Reference Stock has no obligation to take your
interests into consideration for any reason, including when taking any corporate actions that might affect the value of your Notes.
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The Notes Are Subject to Single Stock Risk — The price of the Reference Stock can rise or fall sharply due to factors specific to the Reference Stock and its issuer, such
as stock price volatility, earnings, financial conditions, corporate, industry and regulatory developments, management changes and decisions and other events, as well as general market factors, such as general stock market volatility and
levels, interest rates and economic and political conditions. We urge you to review financial and other information filed periodically with the SEC by the issuer of the Reference Stock.
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The Payments on the Notes Are Subject to Antidilution Adjustments — For certain corporate events affecting the Reference Stock, the calculation agent may make adjustments
to the terms of the Notes. However, the calculation agent will not make such adjustments in response to all events that could affect the Reference Stock. If an event occurs that does not require the calculation agent to make such
adjustments, the value of the Notes may be materially and adversely affected. In addition, all determinations and calculations concerning any such adjustments will be made in the sole discretion of the calculation agent, which will be
binding on you absent manifest error. You should be aware that the calculation agent may make any such adjustment, determination or calculation in a manner that differs from that discussed in this document or the product prospectus
supplement as necessary to achieve an equitable result.
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The Business Activities of the Bank and Our Affiliates May Create Conflicts of Interest — We and our affiliates expect to engage in trading activities related to the
Reference Stock that are not for the account of holders of the Notes or on their behalf. These trading activities may present a conflict between the holders’ interests in the Notes and the interests we and our affiliates will have in their
proprietary accounts, in facilitating transactions, including options and other derivatives transactions, for their customers and in accounts under their management. These trading activities, if they influence the price of the Reference
Stock, could be adverse to the interests of the holders of the Notes. We and one or more of our affiliates may, at present or in the future, engage in business with the issuer of the Reference Stock, including making loans to or providing
advisory services. These services could include investment banking and merger and acquisition advisory services. These activities may present a conflict between our or one or more of our affiliates’ obligations, and your interests as a
holder of the Notes. Moreover, we and our affiliates may have published, and in the future expect to publish, research reports with respect to the Reference Stock. This research is modified from time to time without notice and may express
opinions or provide recommendations that are inconsistent with purchasing or holding the Notes. Any of these activities may affect the price of the Reference Stock and, therefore, the market value of the Notes.
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