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The term "red herring" relates to the: SEC's approval of a stock offering from a company...

The term "red herring" relates to the:

SEC's approval of a stock offering from a company whose future is questionable.

circulation of the company's prospectus prior to approval by the SEC.

document distributed to potential investors that is stamped "incomplete information."

SEC's conditional approval of the prospectus.

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Answer #1

Red herring prospectus is a document to be filed with security exchange commission(sec)before public issue...

SEC verifies red herring prospectus and and based on which if it is does not have any false or fraud oriented information SEC will allow companies to raise funds through public issue..

Red herring prospectus will not have any of the key details or information about how many of share are issued...

based on red herring prospectus SEC can verifiy that the genuinity of SEC even before going for public issue....

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