Examkin

Soru

Zorluk: KolayTypes of Markets and Trading Venues

A growth-stage manufacturing corporation sells a new issue of common stock to investors to raise capital for constructing a new production facility. In which of the following markets does this transaction take place?

  1. Primary marketCevap
  2. B
    Secondary market
  3. C
    Third market
  4. D
    Fourth market

Cevap

The primary market is the venue where corporations issue new securities to raise capital.
The transaction takes place in the primary market because the corporation is issuing new shares to raise capital for business expansion, meaning the proceeds flow directly to the issuer.

Adım Adım Çözüm

1
Identify the issuer's purpose and flow of funds in the scenario.
The corporation is selling new stock directly to raise capital for corporate expansion.
When proceeds from a security sale go directly to the issuing entity, the transaction occurs in the primary market.
2
Differentiate between primary and secondary market structures.
Trading between existing investors takes place in secondary venues (exchanges, OTC, third, or fourth markets), whereas initial capital raising is strictly primary.
Secondary markets handle existing securities trading; primary markets handle new issues.

Anahtar Kavram

Primary Market Capital Raising
Tahmini Süre:45s
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Konular

Types of Markets and Trading Venues

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