29 May 2013

Question Of The Day #81: Disclaimer

Weekly Theme: IPO

Preparation of a registration statement is the first step for any private company looking to go public. This statement has two parts, the first part: “selling document” which is available only to investors in the offering. This selling document is known by a very famous term and what does the name relate to

Answer: (Please highlight the text below)

Red herring prospectus: (the name "Red Herring" relates to the red lettered disclaimer displayed on the front page of each preliminary prospectus)


  1. Selling document is called Prospectus and relates to the important facts about the company's business operations, financial condition, and management.

  2. IPO -Initial Public Offering.

  3. Red Herring

    Red herring is an English-language idiom, a logical fallacy that misleads or detracts from the issue.