Question

You recently sold 100 shares of Microsoft stock to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following best describes this transaction? a. This is an example of a derivative market transaction. b. This is an example of a money market transaction. c. This is an example of an exchange of physical assets. d. This is an example of a primary market transaction. e. This is an example of a direct transfer of capital.

Answer 1

Answer:

Option E                  

Explanation:

A direct transfer refers to the shift of funds from certain form or section of a tax deferred retirement savings plan to another. Direct payments are not deemed to be statutory dividends, and are therefore not taxed as profits or susceptible to premature payment charges. Now normally this form of transition happens digitally.

In simple terms, cash loans exist when a company sells its shares in return for money specifically to the savers. There is no financial institution involved in this procedure. Small firms typically use direct transfers, so very less money is generated during this phase.