Stocks Beginner: The Stock Prospectus

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1.
All of the following information is available in a stock's preliminary prospectus except _______.
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The offering price. The offering price is not included in the preliminary prospectus, which is published before the price is finalized.
2.
To find out how a company intends to invest the capital it raises by selling stock, which prospectus section should you check?
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Use of Proceeds. The "Use of Proceeds" section spells out how the proceeds from the stock offering are to be used.
3.
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).
4.
The Securities and Exchange Commission requires that prospectuses be written in plain English.
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False. The SEC is encouraging companies to use plain English, but dense legal and fiscal lingo can still be found in prospectuses.
5.
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.