Question

Identify whether each the following transactions is a primary market or a secondary market transaction: Jim Henry bought 500 shares of I.B.M. through a broker. Peggy White bought 500 shares of Apple from another investor. New York Life Insurance Co. bought 500,000 shares of Tioga Corp when the company issued the stock.

Answer 1

Answer:

Jim Henry bought 500 shares of I.B.M. through a broker.

• SECONDARY MARKET TRANSACTION

Peggy White bought 500 shares of Apple from another investor.

• SECONDARY MARKET TRANSACTION

New York Life Insurance Co. bought 500,000 shares of Tioga Corp when the company issued the stock.

• PRIMARY MARKET TRANSACTION

Primary market transactions that place when an investor purchases securities at the time the corporation or entity issued them, e.g. if you purchased Amazon's stocks at their IPO (or any other time new stocks were issued), it was a primary market transaction. But if you purchased Amazon's stocks at any other time, it is a secondary market transaction. Almost all the transactions carried out everyday are secondary market transactions.