The ABC Brokerage Firm has sold newly issued securities of the XYZ Corporation to a client. The client will hold onto these securities for a period of time. The securities are considered to be primary securities.
Explanation:
Any type of insurance that can be attained during the time of emergency can be referred as securities. It can be considered as a protection to the money lender when in time the borrower could not repay the money, the lender can acquire the security. There are two types of securities such as primary ad secondary.
A security that is being issues newly by any of the public or private firms or that is being issued by any investor to any of its customers mainly by a brokerage firm to the stock purchaser can be referred as primary security. A secondary securities are issued. by bank or any financial institutions to the customers. Here a brokerage firm sells the newly issued securities to a client and hence it is considered to be primary securities.
