Which of the following is true of a red herring prospectus?
A) It can be distributed to potential buyers during the pre-filing period, and limited sales can be finalized during this period.
B) It can be distributed to potential buyers during the pre-filing period to finalize sales.
C) It can be distributed to potential buyers during the waiting period, but no sales can be finalized during this period.
D) It can be distributed to potential buyers during the post-effective period to finalize any sales.

Question

Quizplus · Accepted Answer

A red herring prospectus can be distributed to potential buyers during the waiting period (or cooling-off period), which takes place after the filing of the registration statement and before the SEC declares it effective. During this period, no sales can be finalized.

Which of the Following Is True of a Red Herring