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Which of the following statements is CORRECT?

A. Capital market transactions involve only the purchase and sale of equity securities, i.e., common stocks.
B. Capital market instruments include both long-term debt and common stocks.
C. If an investor sells shares of stock through a broker, then this would be a primary market transaction.

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Nyctalus

Answer: Option B

Explanation: In simple words, capital market is that market in which securities that are long term in nature are sold and purchased. The maturity period of such securities is generally more than one year.

These, markets transact all types of securities whether it is equity or debt, but it has to be long term in nature.

Hence, from the above we can conclude that the right answer is Option B.

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