Which market relates to the initial issuance of securities to the public?

Which market relates to the initial issuance of securities to the public?

• A. Income Tax
• B. Checking Account
• C. Primary Market (IPO-Initial Public Offering)
• D. Line Of Credit

Answer: (C)

The main idea here is understanding where new securities are issued to raise capital. That happens in the primary market, where a company or government sells new securities to investors for the first time. An IPO is the classic example, with underwriters coordinating the sale, regulatory steps completed, and the proceeds going to the issuer. After issuance, those same securities may later be traded among investors in the secondary market, but the initial sale—creating and selling new securities to raise funds—occurs in the primary market. The other options aren’t markets for issuing securities: income tax is a levy, a checking account is a banking service, and a line of credit is a borrowing facility.

The main idea here is understanding where new securities are issued to raise capital. That happens in the primary market, where a company or government sells new securities to investors for the first time. An IPO is the classic example, with underwriters coordinating the sale, regulatory steps completed, and the proceeds going to the issuer. After issuance, those same securities may later be traded among investors in the secondary market, but the initial sale—creating and selling new securities to raise funds—occurs in the primary market. The other options aren’t markets for issuing securities: income tax is a levy, a checking account is a banking service, and a line of credit is a borrowing facility.