? 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:

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits.

Factory

A building or complex of buildings where goods are manufactured or assembled chiefly by machine.

Foreign Investment

The inflow of capital from external sources into a country to purchase assets, buy stocks, or fund projects, enhancing economic growth.

Interest Rates

The percentage charged or paid for the use of money, typically by a bank or financial institution on loans or savings.