​ Which of the Following Statements Is CORRECT

question 12

Multiple Choice

​ Which of the following statements is CORRECT?

• A) ​If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction.
• B) ​If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction.
• C) ​The IPO market is a subset of the secondary market.
• D) ​Only institutions, and not individuals, can participate in derivatives market transactions.
• E) ​As they are generally defined, money market transactions involve debt securities with maturities of less than one year.

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Definitions:

Revenue Recognition

The accounting principle that determines the specific conditions under which income becomes recognized as revenue.

Installment Sales Method

An accounting method used to recognize revenue from sales where payment is received in installments over a period.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) aimed at making global financial reporting more transparent and comparable.

Realized Gross Profit

The portion of profit that has been earned from completed sales transactions, excluding unrealized profits from continuing transactions.