Which one of the following is a primary market transaction?
A) A dealer selling shares of stock to an individual investor.
B) A dealer buying newly issued shares of stock from a corporation.
C) An individual investor selling shares of stock to another individual.
D) A bank selling shares of a medical ﬁrm to an individual.
E) A sole proprietor buying shares of stock from an individual investor.

Question

Quizplus · Accepted Answer

A primary market transaction involves the sale of newly issued securities directly from the issuer to the buyer. In this case, the dealer is buying newly issued shares of stock from the corporation, making it a primary market transaction. The other choices involve the sale of existing securities and are therefore considered secondary market transactions.

Which One of the Following Is a Primary Market Transaction