Stocks Beginner: The Stock Prospectus

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1.
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.
2.
Where in a prospectus would you look to find out how many shares of stock were included in the company's 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.
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.
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.
5.
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.