What happens in the primary market?

Question

Quizplus · Accepted Answer

The primary market is where newly issued claims, such as stocks or bonds, are sold by the borrowing firm to the initial buyer. This is in contrast to the secondary market, where already issued claims are sold from one investor to another. Therefore, option C is the correct answer. Option A is incorrect because the primary market does not involve the sale of primary inputs like electricity. Option B is incorrect because a corporate financial manager cannot resell previously issued shares in the primary market.

What Happens in the Primary Market