Question: Question (4): Answer the following questions: (6 Marks) 1. Classify the following transactions as taking place in the primary or secondary markets? (4x1=4 marks) Transactions

Question (4): Answer the following questions: (6 Marks) 1. Classify the following transactions as taking place in the primary or secondary markets? (4x1=4 marks) Transactions Primary Market Secondary Market IBM issues $200 million of new common stock. The new Company issues $ 50 million of common stock in an IPO. The Magellan Fund buys $100 million of previously issued IBM bonds. [Prudential Insurance Co. sells $10 million of IGM common stock 2. Investment A pays 8 percent simple interest for 10 years. Investment B pays 7.75 percent compound interest for 10 years. Both require an initial $10,000 investment. Calculate the future value of A minus the future value of B. (2 marks)

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