Which of the Following Is a Primary Market Transaction

question 36

Multiple Choice

Which of the following is a primary market transaction?

• A) You sell 200 shares of IBM stock on the NYSE through your broker.
• B) IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.
• C) You buy 200 shares of IBM stock from your brother. The trade is not made through a broker--you just give him cash and he gives you the stock.
• D) One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.
• E) You invest $10,000 in a mutual fund, which then uses the money to buy $10,000 of IBM shares on the NYSE.

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Definitions:

Wage Rate

The standard amount of pay given for work performed, typically expressed as an hourly rate or annual salary.

Full Employment

A situation in which all available labor resources are being used in the most economically efficient way.

Workers Demanded

The number of employees that employers are willing to hire at a given wage rate.

Economic Immigration

The movement of individuals to a new country with the aim of gaining employment or pursuing investment opportunities, often contributing to the host country's economy.