Which one of the following transactions would occur in the primary market?
A) The gifting of ABC Co. shares by a grandmother to her grandchildren.
B) A ﬁnancial institution selling shares of OPQ stock to another ﬁnancial institution.
C) An individual selling shares of JKL stock to an existing JKL shareholder.
D) A ﬁnancial institution buying shares of LM stock from an LM executive.
E) KM Co. selling new shares of stock to a ﬁnancial institution.

Question

Quizplus · Accepted Answer

The sale of new shares of stock by KM Co. to a financial institution is an example of a transaction in the primary market, where companies issue new securities in order to raise capital. The other options involve the sale or transfer of existing shares, which would occur in the secondary market.

Which One of the Following Transactions Would Occur in the Primary