Stocks Beginner: The Stock Prospectus

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1.
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.
2.
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.
3.
While browsing XYZ Co.s prospectus, you just read that three of its board members are related to each other. Which section were you reading?
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Management. The management section of the prospectus will provide background information on board members.
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.
All of the following information is available in a stocks 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.