Question

Which of the following best defines the term prospectus? A preliminary prospectus distributed to prospective investors...

Which of the following best defines the term prospectus?

A preliminary prospectus distributed to prospective investors in a new issue of securities.

A public issue of securities in which securities are first offered to existing shareholders. Also called a rights offering.

Legal document describing details of the issuing corporation and the proposed offering to potential investors.

The creation and sale of securities on public markets.

The purchase of securities from the issuing company by an investment banker for resale to the public.

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Answer #1

Correct answer will be option (C ) legal document describing details of the issuing corporation and proposed offering to the potential investor

Prospectus is defined as a legal document which is describing the details of the issuing corporation and the proposed offering to the potential investor and it is filed by the company who is seeking to generate funds through initial public offering.

All the other statement are false because they are not representing the true facts regarding prospectus

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