Which of the following is a primary market transaction?
A) You sell 200 shares of IBM stock on the NYSE through your broker.
B) You buy 200 shares of IBM stock from your brother.The trade is not made through a broker;you just give him cash and he gives you the stock.
C) IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.
D) One financial institution buys 200,000 shares of IBM stock from another institution.An investment banker arranges the transaction.
E) IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years.

Question

​Which of the following is a primary market transaction?
A) ​You sell 200 shares of IBM stock on the NYSE through your broker.
B) ​You buy 200 shares of IBM stock from your brother.The trade is not made through a broker;you just give him cash and he gives you the stock.
C) ​IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.
D) ​One financial institution buys 200,000 shares of IBM stock from another institution.An investment banker arranges the transaction.
E) ​IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years.

Quizplus · Accepted Answer

A primary market transaction involves the issuance of new securities, and option C describes IBM issuing new shares and selling them to the public through an investment banker. The other options involve secondary market transactions where securities are being bought and sold among investors without involving the company that originally issued the securities.

​Which of the Following Is a Primary Market Transaction

Which of the Following Is a Primary Market Transaction