What is a critical characteristic of a final prospectus?

• A. It should be vague to protect the issuer's interests
• B. It provides an overview of past performance only
• C. It must be mailed to all purchasers within a specified time
• D. It can be modified anytime without notice

Answer: (C)

The critical characteristic of a final prospectus is that it must be mailed to all purchasers within a specified time. This requirement is essential because it ensures that all investors receive the necessary and complete information about the investment they are considering. The final prospectus serves as a key document that outlines the terms, risks, and material information regarding a specific offering, allowing potential investors to make informed decisions.

In addition, this requirement is rooted in regulatory compliance, as it protects both the interests of investors and the integrity of the market. Investors need access to standardized disclosures in a timely manner to compare different investment opportunities effectively.

The other options do not align with the fundamental principles governing final prospectuses. For instance, the notion of being vague contradicts the need for clarity and transparency in financial disclosures. Providing only an overview of past performance fails to capture the forward-looking aspects and risks associated with the investment, which are vital for informed decision-making. Moreover, the idea that a final prospectus can be modified anytime without notice undermines the legal and regulatory framework that stipulates that material changes to offerings are communicated to potential investors before they make a purchase.