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A feature of buying shares that are listed on the Australian Securities Exchange (ASX) is that:...

A feature of buying shares that are listed on the Australian Securities Exchange (ASX) is that:

  1. It is a primary market transaction
  2. Dividend payments are guaranteed by the ASX
  3. Shareholder’s loss is limited to the share price
  4. The shares are purchased directly from the company
  5. Shareholders have no voting rights
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Answer #1

Australian Stock Exchange (ASX) is the primary securities trading exchange in Australia. Primary market is that market where the securities are sold for the first time by the company.

Hence, the answer is a. It is a primary market transaction

Other features such as guaranteed dividend, limited loss, no voting rights are decided by the company and are independent of stock exchange and hence not true.

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Answer #2

The correct answer is actually C. Even though the ASX is the primary (or main in this context) market for trading Australian shares, it is not a primary transaction to purchase shares. When a retail investor purchases shares from the ASX they are making a secondary transaction because shares are traded between investors. When an IPO occurs that is when a primary transaction can occur (first time sale of shares to the public).

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answered by: Raffi
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