When a security is sold in the financial markets for the first time:
A) funds flow from the saver to the issuer.
B) funds flow from the borrower to the saver.
C) it represents a secondary transaction to the underwriter.
D) it is an asset for the borrower.

Question

Quizplus · Accepted Answer

When a security is sold in the financial markets for the first time, it is called an initial public offering (IPO). In this situation, the funds flow from the saver (investors) to the issuer (the company selling the security). The issuer receives funds in exchange for ownership in the company, and the investors receive the newly issued shares of stock.

When a Security Is Sold in the Financial Markets for the First