What is a prospectus in economics?

In economics, a prospectus is a formal document that outlines the details of a proposed investment or project, typically used by companies when they seek to raise capital from investors. It provides essential information about the investment opportunity, including financial statements, risk factors, and the intended use of funds. The prospectus aims to inform potential investors and help them make educated decisions about whether to invest. It is often required by regulatory authorities to ensure transparency and protect investors.