The preliminary version of a prospectus is called a red herring.

Question

Quizplus · Accepted Answer

This is true. A red herring is a preliminary version of a prospectus that is filed with the SEC and distributed to potential investors. It contains most of the information that will be in the final prospectus, but may be missing certain key details, such as the final offering price. The name "red herring" comes from the disclaimer that is printed in red ink on the cover of the document, warning investors that the information contained within is not yet complete or final.

The Preliminary Version of a Prospectus Is Called a Red