Sam Schiester, a stockbroker at Schemes Financial Services Company, called you the other day asking if you would like to purchase an IPO. "The hot new company, Hottie Potatee, is going public, and I thought you might want to get in on it," he exclaimed. If you agree to buy shares of this company, this trade will occur on the secondary market.

Question

Quizplus · Accepted Answer

If you agree to buy shares of Hottie Potatee in its initial public offering (IPO), the trade will occur on the primary market, not the secondary market. The secondary market is where already existing securities are bought and sold among investors.

Sam Schiester, a Stockbroker at Schemes Financial Services Company, Called