Stocks Beginner: The Stock Prospectus

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1.
The stock prospectus is an abridged version of the information a company files with the _______.
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Securities and Exchange Commission. The prospectus must be filed with the SEC, which enforces securities disclosure provisions.
2.
All of the following may be found on the cover of a stock prospectus except _______.
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Risk factors. Risk factors are not spelled out on the cover of the prospectus, but all of the other listed information may be found there.
3.
All of the following are situations in a prospectus that may indicate trouble, except for which?
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Management is compensated with stock options. When management is compensated with stock options, it benefits personally when the company growsa potentially good sign. The other listed factors may mean trouble for the company.
4.
Where in a prospectus would you look to find out how many shares of stock were included in the companys offering?
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All of the other sections. The cover, summary, and "Description of Capital Stock" sections each include the number of new shares being offered.
5.
Where can you get a stock prospectus?
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All of the other options. You can obtain a prospectus from the company, its underwriters, or on the Internet (EDGAR).