Which one of the following is a primary market transaction?

Step 1: Define the Problem

Identify the key components of the question that need to be addressed: Determine what constitutes a primary market transaction.

Step 2: Break Down the Problem

Divide the problem into smaller, manageable parts:

• Understand what a primary market is.
• Identify the characteristics of a primary market transaction.

Step 3: Apply Relevant Concepts

Use appropriate academic theories or formulas to solve each part of the problem:

• A primary market is where new securities are issued and sold for the first time.
• Transactions in the primary market involve the issuer and the investor directly.

Step 4: Analysis, Verify and Summarize

Analyze each part in detail if necessary, carry out the calculations by steps. Verify the calculations result and summarize the findings:

• In a primary market transaction, the company receives funds directly from the investors.
• Examples include Initial Public Offerings (IPOs) and new bond issues.

Final Answer

A primary market transaction is when a company issues new securities directly to investors, such as during an Initial Public Offering (IPO).