The primary market includes:
A) The purchase and sale of shares of stock between two shareholders.
B) The sale of stock by a shareholder in the open market.
C) The sale of stock by a shareholder in an auction market.
D) The sale of new securities by a corporation for the first time to the general public.
E) The sale of stock by a shareholder in the OTC market.

Question

Quizplus · Accepted Answer

The primary market involves the issuance of new securities directly from an issuer to investors for the first time, such as when a corporation sells new stocks to the public in an initial public offering (IPO). Choices A, B, C, and E describe transactions that occur in the secondary market, where existing shares of stock are traded among investors.

The Primary Market Includes