Regulations & ConductQuestion 108 of 125
A preliminary prospectus (red herring) used before a registration is effective:
a.Contains the final public offering price and effective date
b.Constitutes an offer to sell the securities
c.May be used to accept customer payments
d.Omits the final offering price and effective date and is used to gauge investor interest
Explanation
A red herring is a preliminary prospectus circulated during the cooling-off period; it omits the final public offering price and the effective date and includes a legend noting it is not an offer to sell. It is used to solicit non-binding indications of interest, not to make sales.
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