Question

You recently sold 100 shares of your new company, XYZ Corporation, to your brother at a family reunion. At the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. Which of the following statements best describes this transaction?

A. This is an example of a primary market transaction.
B. This is an example of a direct transfer of capital.
C. This is an example of an exchange of physical assets.

Answer 1

Answer:

The correct answer is b) This is an example of a direct transfer of capital.

Explanation:

The term Direct transfer refers to the internal transactions that are made in a company.  They commercialize their stocks or bonds directly to savers. The financier system doesn't play any role in this transaction because the Direct transfers are not considered official distributions.