Which of the following is a primary market transaction?a. You sell 200 shares of IBM stock on the NYSE through your broker.b. 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.c. IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.d. One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.e. IBM sells 2,000,000 shares of treasury stock to its employees when they exercise options that were granted in prior years.

Respuesta :

Answer:

c. IBM issues 2,000,000 shares of new stock and sells them to the public through an investment banker.

Explanation:

A primary market issues new securities for companies that are seeking debt-based or equity-based source of finance. After the initial purchase, the subsequent buying and reselling is done in the secondary market. Bulk of daily trading occurs in the secondary market.

So sale of 2,000,000 new shares by IBM to the public through an investment banker is a form of primary market transaction.