Which of the following would be considered a primary market transaction?
A) A buy order to an investment banker for a new public stock offering.
B) A buy order to a broker for shares of a company on the TSX.
C) A buy order to a broker for shares of a company on the Venture Exchange.
D) A buy order to a dealer for shares of a company OTC.
E) A sell order to a broker for a stock listed on the TSX.

Question

Quizplus · Accepted Answer

A primary market transaction involves the issuance of new securities directly from the issuer to the investor. Choice A, a buy order to an investment banker for a new public stock offering, is an example of a primary market transaction because it involves purchasing securities directly from the issuer at the time they are first offered to the public. Choices B, C, D, and E involve transactions in the secondary market, where investors buy and sell securities among themselves, rather than directly from the issuing company.

Which of the Following Would Be Considered a Primary Market