Which of the following is a primary market transaction?

a. 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.

b. IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years.

c. One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.

d. IBM issues 2,000,000 shares of new stock and sells them to the public.

e. You sell 200 shares of IBM stock on the NYSE through your broker.

Question

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24 August, 11:13

Which of the following is a primary market transaction?

a. 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.

b. IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years.

c. One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.

d. IBM issues 2,000,000 shares of new stock and sells them to the public.

e. You sell 200 shares of IBM stock on the NYSE through your broker.

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Answers (1)

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Courtney · Answer 1

d. IBM issues 2,000,000 shares of new stock and sells them to the public.

Explanation:

In the Primary market, new shares are issued for the first time.