What is the difference between a prospectus and a red herring prospectus?
A) The red herring prospectus is a preliminary version distributed to potential equity investors.
B) The red herring prospectus is a corrected version of the prospectus.
C) The red herring prospectus is only for issuing long-term bonds.
D) The red herring prospectus is the report filed with the SEC but not necessarily distributed to equity investors.

Question

Quizplus · Accepted Answer

The red herring prospectus is indeed a preliminary version of the prospectus that is distributed to potential investors before the final prospectus is issued. It helps in gauging investor interest and determining the price range of the securities to be offered.

What Is the Difference Between a Prospectus and a Red