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 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.

---

Definitions:

Executive Financial Analyst

A professional role focused on evaluating financial data and economic trends to guide senior management in making strategic business decisions.

Equity

The concept of fairness in economics, which may refer to ownership interest in a company (as in stockholders' equity) or to a principle of justice and fairness in the distribution of wealth and resources.

Deadweight Loss

A societal expense arising from market inefficiency, happening when there is a mismatch between supply and demand.

Equilibrium

A state in a market where the supply of a good matches its demand, resulting in stable prices.