A potential investor in a new issue must be given a(n):
A) annual stockholders' report.
B) investment newsletter.
C) established brokerage fee schedule.
D) prospectus.
E) brokerage report.

Question

Quizplus · Accepted Answer

A prospectus is a legal document that provides potential investors with important information about a security being offered for public sale, such as a new issue of stock. It includes details on the company, its financials, the terms of the offering, potential risks, and other crucial information that investors need to make informed decisions. Annual stockholders' reports and investment newsletters are typically provided to existing shareholders and do not necessarily provide the same level of detail as a prospectus. A brokerage fee schedule and brokerage report may be relevant for investors considering a particular brokerage firm, but they are not directly related to evaluating a new issue.

A Potential Investor in a New Issue Must Be Given