Which market is used for initial issuance of securities directly to investors (IPO)?

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

Answer: (B)

Issuing new securities to investors for the first time happens in the primary market. This market is where the issuer raises fresh capital by selling new stock or bonds directly to investors, with the proceeds going to the issuer. An IPO is the classic example, marking the initial sale of a company's shares to the public and typically coordinated with underwriters to set the price and allocate shares. In contrast, the secondary market is where already-issued securities are traded between investors, and the issuer does not receive funds from those trades. The other options don’t pertain to issuing securities—terms like income market, checking account, or line of credit relate to different financial concepts altogether.