Question

Of the following transactions, which one would be most likely carried out in the primary market?

____

1. Michael Jordan sells some of his stock in Nike Corporation
2. Manulife Financial buys bonds of Scotiabank Group from Merrill Lynch

C)        The City of Windsor sells bonds to raise money to build a new stadium

D)        IBM sells some stock it owns in Intel to raise some additional cash for research

Answer 1

Answer - Statement 3

Primary market deals with all the issuances or transactions that involve the companies going to the market for first time to raise the money. In this case, for statement A, B and D, the shares are merely changing hand, whereas in statement C, new securities are being issued.