单选题 Which of the following statements regarding primary and secondary markets is FALSE?

A. Secondary market transactions occur between two investors and do not involve the firm that originally issued the security.
B. New issues of government securities can be sold on the primary market.
C. Prevailing market prices are determined by primary market transactions and are used in pricing new issues.

【正确答案】 C

【答案解析】Prevailing market prices are determined by the transactions that take place on the secondary market. This information is used to determine the price of new issues sold on primary markets.