Question

The ABC Brokerage Firm has sold newly issued securities of the XYZ Corporation to a client. The client will hold onto these securities for a period of time. The securities are considered to be _____.

primary securities
secondary securities
financial intermediaries
money market intermediaries

Answer 1

Option A

The securities are considered to be primary securities

Step-by-step explanation:

Primary securities are distributed by the investor to purchasers (brokerage firms to commodity buyers). The primary market is where securities are formed. It's in this market that firms trade new commodities and bonds to the public for the primary time.

These sales afford a chance for investors to purchase securities from the bank that did the primary underwriting for a distinct commodity. When firms declare new securities, they are acquired in the primary securities market. The essential information to know regarding the primary market is that securities are bought instantly from an issuer.