Which of the following statements is CORRECT? a. If you purchase 100 shares of D

Question

Which of the following statements is CORRECT?

a. If you purchase 100 shares of Disney stock from your brother-in-law, this is an example of a primary market transaction. b. The NYSE is an example of an over-the-counter market. c. If Disney issues additional shares of common stock through an investment banker, this would be a secondary market transaction. d. As they are generally defined, money market transactions involve debt securities with maturities of less than one year. e. Only institutions, and not individuals, can engage in derivative market transactions.

Explanation / Answer

Solution.

b. The NYSE is an example of an over-the-counter market.

The secondary market is what people are talking about when they refer to the "stock market". This includes the New York Stock Exchange (NYSE), Nasdaq and all major exchanges around the world. The defining characteristic of the secondary market is that investors trade among themselves. That is, in the secondary market, investors trade previously issued securities without the issuing companies' involvement.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.