Which of the following is an example of a primary market transaction?
A)You sell 200 shares of IBM stock on the TSX through your broker.
B)IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.
C)One financial institution buys 200,000 shares of IBM share from another institution with help of an investment banker.
D)You invest $10,000 in a mutual fund, which then uses the money to buy $10,000 of IBM shares on the TSX.

Question

Quizplus · Accepted Answer

A primary market transaction involves the issuing and selling of new securities by a company to the public through an investment bank. Option B describes this type of transaction. The other options describe secondary market transactions where previously issued securities are bought and sold among investors.

Which of the Following Is an Example of a Primary