Prospectus (finance)

Hey kiddo! Today we are going to talk about something called a "prospectus". A prospectus is like a book that tells you about a company that wants to sell its stocks or bonds to people who want to invest their money in that company. You know how you read books with a lot of information? Well, a prospectus is like that book, but it's about a company and how it makes money.

Inside the prospectus, you can find a lot of information about the company that you will be investing your money in. It tells you about the company's history, what it does to make money, how much money it has made in the past, and what it plans to do in the future to make more money.

The prospectus also tells you if the company has any risks or problems that might make it harder for it to make money in the future. This is important so that you can make an informed decision on whether or not to invest your money in the company.

So, when you buy a stock or bond from a company, you get a piece of that company. That means if the company does well and makes a lot of money, the value of your piece of the company (the stock or bond) will go up, and you can sell it for more money than you paid for it.

Well, that's it for today's lesson. I hope you learned something new about the prospectus and how it helps you make smart decisions when it comes to investing your money.