Question

A primary market would be utilized when:

A. investors buy or sell existing securities.

B. shares of common stock are exchanged.

C. securities are initially issued.

D. a commission must be paid on the transaction.

Answer 1

Answer: Option C

Step-by-step explanation: Primary market refers to the market in which the securities are sold to the general public for the first time by the companies. In simple words, the initial public offering process takes place in such markets. The securities could be of any type whether debt, equity or preference.

The market in which existing securities are bough and sold is called secondary market. And the commission is paid in both secondary and primary market.

Hence the correct option is C.