Question

multiple choice: conceptual
you recently sold 100 shares of microsoft stock to your brother at a family reunion. at the reunion your brother gave you a check for the stock and you gave your brother the stock certificates. which of the following best describes this transaction?
this is an example of a direct transfer of capital.
this is an example of a primary market transaction.
this is an example of an exchange of physical assets.
this is an example of a money market transaction.
this is an example of a derivative market transaction.

Explanation:

Direct transfer of capital occurs when a business sells its stocks or bonds directly to savers without going through any type of financial institution. Here, you sold Microsoft stocks directly to your brother without an intermediary, which is a direct transfer of capital. A primary - market transaction is when a company issues new securities for the first time. Stocks are financial assets, not physical assets. Money - market transactions involve short - term debt securities, and derivative - market transactions involve derivatives like futures and options.

Answer:

This is an example of a direct transfer of capital.