True or false: If an individual investor buys or sells a currently outstanding stock through a broker, this is a primary market transaction
False
False.
When an individual investor buys or sells a currently outstanding stock through a broker, this is an example of a secondary market transaction.
The primary market is where securities, such as stocks and bonds, are initially created and sold to the public. This usually happens through an initial public offering (IPO) of a company’s stock. Once the securities are sold to the public, they can then be traded on secondary markets such as stock exchanges or over-the-counter markets. In these secondary market transactions, the securities are bought and sold between investors, but the money exchanged is not going to the issuing company.
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