Which of the Following Is an Example of a Primary

question 47

Multiple Choice

Which of the following is an example of a primary market transaction?

• A)ANZ bank issues new shares to a large funds manager in a private placement.
• B)The ANZ bank sells 10-year government bonds that have 5 years to maturity.
• C)Mary sells 1000 Qantas shares through her broker.
• D)BHP issues new bonds which will mature in ten years.
• E)Both A and D are primary market transactions.

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Definitions:

Fair Value Hedge

A hedge of the exposure to changes in fair value of a recognized asset or liability, or an unrecognized firm commitment, that is attributable to a particular risk.

Forward Contract

A financial contract obligating the buyer to purchase, and the seller to sell a specific asset at a predetermined future date and price.

Spot Rates

The current market price at which a particular security can be bought or sold for immediate delivery.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.