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 cheque for the shares and you gave your brother the share certificates.Which statement 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.

Question

Quizplus · Accepted Answer

This is an example of a direct transfer of capital as the shares were sold directly from one individual to another without involving any intermediaries or a market exchange. Option A is incorrect as there was no exchange of physical assets involved. Option B is incorrect as primary market transactions involve the sale of new securities to the public. Option D is incorrect as money market transactions typically involve short-term investments in financial instruments such as Treasury bills or commercial paper.

You Recently Sold 100 Shares of Your New Company,XYZ Corporation,to