Question

What is a primary market?

A. a market where primary inputs like steel are sold
B. a market where newly issued claims are sold to initial buyers by the borrowing firm
C. a market where you can sell any bonds you own as a private investor
D. a market where you can sell any stocks you own as a private investor

Answer 1

Answer:

A. a market where primary inputs like steel are sold

Explanation:

The primary market is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market. These trades provide an opportunity for investors to buy securities from the bank that did the initial underwriting for a particular stock. An IPO occurs when a private company issues stock to the public for the first time.