Why is Prospectus useful for Investors?
A Prospectus is a legal document that is submitted to the concerned authority and contains information for the public regarding an investment offering. It is very useful for investors since they learn about the risks associated with buying securities or funds. Generally, risks are briefly mentioned in the prospectus at the early stage and described in more detail later. When the company is acquiring funds by issuing stocks or bonds, it is the investor’s duty to review the company’s financial statements to make sure it is financially stable enough to uphold its obligations.