A Purchase of a New Issue of Stock Takes Place

question 64

Multiple Choice

A purchase of a new issue of stock takes place

• A) in the secondary market.
• B) in the primary market.
• C) usually with the assistance of an investment banker.
• D) in the secondary and primary markets.
• E) in the primary market and usually with the assistance of an investment banker.

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to purchase at a given price.

Equilibrium Price

The market price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers.

Equilibrium Quantity

The level of goods or services being both offered and requested at the market's equilibrium price.

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, clearing the market.