If an individual investor uses the services of a broker to buy and sell stocks that are currently being traded in the stock market, the transaction is referred to as a primary market transaction.

Question

Quizplus · Accepted Answer

A primary market transaction involves the issuance of new securities by a company, while a transaction between an individual investor and a broker in which they buy and sell existing stocks is referred to as a secondary market transaction.

If an Individual Investor Uses the Services of a Broker