Final answer:
True, information that would deter a prudent, average investor from purchasing securities if disclosed correctly is a material fact. Material facts in securities law are those that would significantly alter the total mix of information available to an investor, which are essential in making informed investment decisions.
Step-by-step explanation:
A statement that would deter or tend to deter an average, prudent investor from purchasing securities if it were stated correctly or disclosed is indeed considered a material fact. The term material fact in securities law refers to any information that a reasonable investor would consider important in making an investment decision. Material facts can include a wide range of information, such as financial performance, risks associated with the investment, or changes in the company's business.
In the context of securities law, materiality is determined by considering whether there is a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the 'total mix' of information made available. Thus, the correct answer to the student's question is a. True, because the definition of materiality directly addresses the potential impact of information on an investor's decision-making process.