You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion. At the reunion your brother gave you a cheque for the shares and you gave your brother the share certificates. Which of the following statements best describes this transaction?
A) This is an example of an exchange of physical assets.
B) This is an example of a primary market transaction.
C) This is an example of a direct transfer of capital.
D) This is an example of a money market transaction.

Question

Quizplus · Accepted Answer

This is an example of a direct transfer of capital, as the shares were sold directly from one individual to another without involving any intermediaries or financial institutions. It is not an exchange of physical assets as there was no exchange of physical property, and it is not a primary market transaction as the shares were not sold to the public for the first time. It is also not a money market transaction as it does not involve short-term debt securities.

You Recently Sold 100 Shares of Your New Company, XYZ