Which of the following is true of a primary market?
A) It is an organized market in which all financial derivatives are traded.
B) It is regulated by The Sarbanes-Oxley Act.
C) It is a market where smaller, unlisted securities are traded.
D) It is the only market in which the issuer is directly involved in the transaction.

Question

Quizplus · Accepted Answer

A primary market is a market where newly issued securities are traded for the first time, and the issuer is directly involved in the transaction. This is different from a secondary market, where previously issued securities are traded among investors. A primary market can include various securities such as stocks, bonds, and IPOs, and it is not restricted to a specific type of financial derivative. While The Sarbanes-Oxley Act regulates financial reporting and accounting standards, it does not specifically regulate primary markets. Smaller, unlisted securities may be traded on a primary market, but the market does not exclusively trade in these types of securities.

Which of the Following Is True of a Primary Market