Trading, Accounts & Prohibited ActsQuestion 180 of 398
When a company sells newly issued shares to the public for the first time and receives the proceeds, this transaction takes place in which market?
a.The secondary market
b.The primary market
c.The third market
d.The fourth market
Explanation
The primary market is where issuers raise capital by selling new securities directly to investors, as in an IPO; the proceeds go to the issuer. The secondary market is where investors trade already-issued securities among themselves, with proceeds going to the selling investor.
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