What is a 'prospectus' and how does it help investors?

What is a 'prospectus' and how does it help investors?

A prospectus actually is the beginning of information that goes to the public, or that needs to go to the public, prior to raising money to purchase this item that you're selling. So to give an example is a prospectus on a mutual fund. What you do there is you send your prospectus out to your prospects or the individuals you want to receive money from in order to purchase your mutual fund, and it has all the information in a prospectus in regards to the goals and objectives of the investment too. It has to do with the officers, it has to do with dividend payments or non payments, and it has to do with the actual formulation and running of that fund itself.