? Which of the Following Is a Primary Market Transaction

question 34

Multiple Choice

? Which of the following is a primary market transaction?

• A) ?You sell 200 shares of Johnson & Johnson stock on the NYSE through your broker.
• B) ?Johnson & Johnson issues 2,000,000 shares of new stock and sells them to the public through an investment banker.
• C) ?You buy 200 shares of Johnson & Johnson stock from your younger brother.You just give him cash and he gives you the stock-the trade is not made through a broker.
• D) ?One financial institution buys 200,000 shares of Johnson & Johnson 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 Johnson & Johnson shares on the NYSE.

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Definitions:

Operating Activities

Business activities directly related to the production and delivery of goods and services, generating the majority of a company's revenue and cash flows.

Statement Of Cash Flows

A financial report that shows how changes in balance sheet and income affect cash and cash equivalents.

Financing Activities

Transactions and events where a company raises funds to support its operations and expansions, typically involving equity and debt.

Net Cash

The amount of cash available after accounting for cash inflows and outflows, providing a clear picture of an entity's liquidity.