[Coffee Shops] Marley wants to open a chain of coffee shops but needs some investors. Her friend Marc tells her that she should be sure that she satisfies the requirements of the SEC. Marc tells her that she has to provide information to the SEC involving a description of the securities, an explanation of how proceeds will be used, information regarding the management of the company and other matters. He tells her that she also has to provide a document to the SEC that will be provided as an advertising tool to potential investors who can rely on it to decide whether they should buy the securities. Marley says that she does not want to do that. She explains to Marc that insofar as the coffee shop venture is concerned, she does not want to advertise, and she only wants to offer securities to a limited number of wealthy friends. Particularly, she has her friend Annaliese in mind, who has a net worth of at least $3 million.
-Which of the following is the term for the document referenced by Marc to be provided to the SEC that will be used as an advertising tool to potential investors who can rely on it to decide whether they should buy securities?

Question

Quizplus · Accepted Answer

The document referenced by Marc that needs to be provided to the SEC and can be used as an advertising tool for potential investors is known as a prospectus. A prospectus contains detailed information about the company's business, financial status, and the securities being offered to the public, helping investors make informed decisions.

[Coffee Shops] Marley Wants to Open a Chain of Coffee