Canadian Securities Course (CSC) Practice Exam · Question
An individual investor purchases shares of a newly issued common stock from a Canadian manufacturing company that is expanding its operations. This transaction is an example of an activity in the:
The purchase of newly issued shares directly from a company is a transaction in the primary capital market. This is where companies raise new capital by selling
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Question: An individual investor purchases shares of a newly issued common stock from a Canadian manufacturing company that is expanding its operations. This transaction is an example of an activity in the:
Answer options:
- Secondary capital market.
- Money market. ✅ Primary capital market.
- Derivatives market.
Correct answer: Primary capital market.
Explanation: The purchase of newly issued shares directly from a company is a transaction in the primary capital market. This is where companies raise new capital by selling securities for the first time.
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