Question

Lew, an individual investor, sold 100 shares of Global Tech stock on Monday. Janice, another individual investor, purchased those shares but never met Lew. You know for certain that this trade occurred in which market?
A. Primary market
B. Dealer market
C. NASDAQ
D. Secondary market
E. NYSE

Answer 1

Answer: Option D. Secondary Market

Explanation:

Secondary market is a marketplace where already issued shares and securities can be bought and sold by the investors. Secondary market is a market where investors buy shares or securities from other investors, and not from the issuing company. When a company issues its securities for the first time, it does it in the primary market. After the Initial Public Offering, those securities get available for trade in the secondary market. Stock markets such as the New York Stock Exchange (NYSE) and the NASDAQ are examples of the secondary markets.