SERIES-6 practice question 20 of 35

Which of the following is an example of a primary market transaction?

Full set: 325 questions

Answer options

A: Exco Resources (XCO) sells a new issue of 7.5%, 8-year notes. Correct answer

B: Ms. Talker calls her broker and places a market order to sell shares of AT&T (T) on the NYSE.

C: Mr. Safe purchases a Treasury bill with two weeks remaining to maturity.

D: Mr. Green places an order to buy shares of Sunvalley Solar, Inc. (SSOL), a stock selling on the OTC Bulletin Board.

Correct Answer:

A. Exco Resources (XCO) sells a new issue of 7.5%, 8-year notes.

Explanation

Exco Resources’ new bond issue is a primary market transaction. The primary market refers to the market for new issues. The other three scenarios describe transactions in securities that are already being traded and are secondary market transactions.

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