Question

Which of the following statements is CORRECT? a. If General Electric were to issue new stock this year it would be considered a secondary market transaction since the company already has stock outstanding. b. Capital market transactions only include preferred stock and common stock transactions. c. The distinguishing feature between spot markets versus futures markets transactions is the maturity of the investments. That is, spot market transactions involve securities that have maturities of less than one year, whereas futures markets transactions involve securities with maturities greater than one year. d. Both Nasdaq "dealers" and NYSE

Answer 1

Option (a)

Step-by-step explanation:

Whenever a company publicly sells new stocks and bonds for the first time, it does so in the Primary Capital Market. This market is also referred to as new issues market for this very reason.

The Secondary capital market is where securities are traded after the company has sold it's offerings in the primary market. This is also referred to as the stock market.

The New York Stock Exchange (NYSE) and NASDAQ are secondary markets.

Hence, if General Electric were to issue new stock this year it would be considered a secondary market transaction since the company already has stock outstanding.