Question

Which one of the following is a primary market transaction? Multiple Choice Sale of currently outstanding stock by a dealer to an individual investor Gift of stock by a shareholder to a family member Gift of stock from one shareholder to another shareholder Stock ownership transfer from one shareholder to another shareholder Sale of a new share of stock to an individual investor

Answer 1

Answer: Sale of a new share of stock to an individual investor

Explanation: Primary market refers to the market in which newly issued securities are offered to the general public for the first time. In other words, these are the market where the initial public offerings takes place.

The market in which the existing securities are sold and bought by the investors is called secondary market.

Thus, from the above we can conclude that the last statement is an example of primary market transaction.