Classify the Following Transactions as Taking Place in the Primary

question 18

Essay

Classify the following transactions as taking place in the primary or secondary markets:
a. A company issues new common stock.
b. A company issues common stock in an IPO.
c. A shareholder sells preferred stock out of its marketable securities portfolio.
d. A mutual fund buys previously issued bonds.
e. An insurance company sells another company's common stock.
f. A company buys another company's stock from a mutual fund.

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Definitions:

Liability

The state of being responsible for something, especially in terms of legal or financial obligations.

Investment in Trade

The allocation of resources, including money, into the buying and selling of goods and services between countries with the aim of generating profits.

Order or Estate

Historical classifications of society, especially in pre-modern Europe, divided into broad groups such as the clergy, the nobility, and common people.

Birth

The process of being born, marking the beginning of a new life outside the mother's womb.