What is a Prospectus?

Answer:
A prospectus is a legal document that is given

to investors; it has an assortment of information that an investor may be interested in. Some of the information shown in a prospectus includes:

· the company’s most recent financial statements,
· the list of directors and officers including their biographies,
· a list of litigation the company is currently involved in,
· other information that may be considered material and important for investors to know.

You will receive a prospectus if you decide to invest in a company or mutual fund. If you invest in a mutual fund you will receive a prospectus about that fund; this is similar to a company’s prospectus but the information is focused on the fund’s performance and its managers.

Luckily, your financial advisor will give you an overview of any funds you are considering so you do not have to read the entire prospectus. Although a prospectus will contain valuable information, they can also be long and difficult to understand for the average investor.


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