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    Question

    Which of the following statements about the primary market is correct?

         1. It is a market for trading existing securities.

         2. It involves the issuance of new securities.

         3. It includes IPOs and FPOs.

    A 1 and 2 only Correct Answer Incorrect Answer
    B 2 and 3 only Correct Answer Incorrect Answer
    C 1 and 3 only Correct Answer Incorrect Answer
    D 2 only Correct Answer Incorrect Answer
    E 1, 2, and 3 Correct Answer Incorrect Answer

    Solution

    The primary market involves the issuance of new securities and includes IPOs and FPOs. Trading of existing securities occurs in the secondary market.  

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