Question

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

Answer 1

Answer:

The correct answer is the option B: Sale of a new share of stock to an individual investor.

Explanation:

To begin with, the primary market is where the securities are created and therefore that it is in this type of market in where the firms sell for the first time the new shares that they have in stock to the public that are looking to demand it and that is why this is the moment that the investors have to contribute for the first time to the capital of the company. In conclussion, a primary market transaction is the sale of a new share of stock to an individual investor.

Answer 2

Answer:

sale of a new share of stock to an individual investor

Explanation:

Securities are created in the primary market. With an IPO which stands for initial public offering, new stocks are sold to the public by companies on a first time basis.

The sale of a new share of stock in the question is an example of a primary market transaction.