Series 79 practice questioneasyProspectus Requirements
A preliminary prospectus used during the cooling-off period must display which legend on its cover?
- ANot an offer to sell
- BSubject to completion✓ Correct answer
- CEffective immediately
- DGuaranteed by the SEC
Explanation
Why B — Subject to completion
A red herring must state 'subject to completion' to indicate that the registration is not yet effective. This warns investors the information is preliminary and may change.
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