Could anyone help me understand why the below question, picks the answer “b” as the question is not saying, the company is offering “the first time shares to the public or IPO”? Shouldn’t it be Secondary market?
An oil and gas exploration and production company announces that it is offering
30 million shares to the public at $45.50 each. This transaction is most likely
a sale in the:
A futures market.
B primary market.
C secondary market.
B is correct. This transaction is a sale in the primary market. It is a sale of
shares from the issuer to the investor and funds flow to the issuer of the security
from the purchaser.