Series 7 Exam Question 325: Answer and Explanation

Question: 325

All the following information is required on a preliminary prospectus EXCEPT

• A. the final offering price
• B. the purpose for which the issuer is raising the funds
• C. a statement in red lettering stating that items on the preliminary prospectus are subject to change before the final prospectus is issued
• D. the issuer's history and financial status

Correct Answer: A

Explanation:

A. The final offering price would not be found on the preliminary prospectus (red herring) because the price hasn't been finalized at this point. After the issuer and the syndicate manager come up with a final offering price, they place it on the final prospectus.