Which of the following transactions does not take place in the primary market? An investor:
A) buying a newly issued municipal bond.
B) buying shares of an initial public offering.
C) selling one hundred shares of stock through a stock broker.
D) buying a U.S. Treasury bill through the government auction.

Question

Quizplus · Accepted Answer

Transactions in the primary market involve the issuance of new securities directly from the issuer to the investor. Choices A, B, and D all involve the purchase of newly issued securities directly from the issuer (a municipality, a company, and the government, respectively). Choice C involves a secondary market transaction, where an investor sells existing shares of stock to another investor through a broker, rather than buying directly from the issuer.

Which of the Following Transactions Does Not Take Place in the Primary