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 check for the stock and you gave your brother the stock 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.
E) This is an example of a derivatives market transaction

Question

Quizplus · Accepted Answer

This transaction is a direct transfer of capital because the shares were sold directly to the brother without involving a third-party intermediary or financial institution. The fact that physical stock certificates were exchanged is not relevant to the type of transaction. It is also not a primary market transaction because the shares were not sold by XYZ Corporation to an investor for the first time.

You Recently Sold 100 Shares of Your New Company, XYZ