Primary Vs Secondary Market

This question tests your understanding of how equity securities are created and traded, which is a basic concept in capital markets. In investment banking interviews, candidates are expected to know who is selling shares, who is buying them, and what role the company plays when stock first comes to market versus when investors trade existing shares among themselves. It also helps show that you understand the difference between capital raised by the issuer and ownership transfers between market participants, a distinction that comes up often in equity financing discussions.