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.
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.
3.
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.
4.
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).
5.
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.