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In which market does the issuer of a security receive the proceeds of the sale?
AThe secondary market
BThe primary market
CThe dealer market
DThe fourth market
Answer & Solution
Correct answer: B. The primary market
1. The primary market is where new securities are sold to the public, usually with the help of investment bankers.
2. In that market the issuer of the security gets the proceeds from the transaction.
3. A security is sold in the primary market just once, when the corporation or government first issues it.
4. Every later trade happens in the secondary market among investors, and the issuer is generally not involved, so no money reaches it.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 16 "Understanding Financial Management and Securities Markets", section 16.6 Securities Markets_
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