Which of the Following Is True of a Primary Market

question 4

Multiple Choice

Which of the following is true of a primary market?

• A) It is an organized market in which all financial derivatives are traded.
• B) It is regulated by The Sarbanes-Oxley Act.
• C) It is a market where smaller, unlisted securities are traded.
• D) It is the only market in which the issuer is directly involved in the transaction.

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Definitions:

Competitive Price-searcher

A market structure where firms set their prices and output levels to compete for consumers in a market with many sellers and product differentiation.

Long-run Equilibrium

A state in which all aspects of the market, including supply, demand, and price, are stabilized over time, allowing for full adjustment to any economic changes.

MR = MC

This equation represents the profit-maximizing condition in economics where marginal revenue (MR) equals marginal cost (MC), often used to determine the optimal level of output.

Competitive Price-searcher

A market participant who actively compares prices among competitors to find the best possible deal, often in markets with imperfect competition.