SIE practice questioneasySecondary Market
When an investor buys shares of Apple stock on the New York Stock Exchange (NYSE), this transaction takes place in the:
- APrimary market
- BSecondary market✓ Correct answer
- CThird market
- DFourth market
Explanation
Why B — Secondary market
Buying existing shares on an exchange like the NYSE is a secondary market transaction. The shares have already been issued — they are trading between investors. The issuer (Apple) does not receive any proceeds from this sale. Primary market transactions involve newly issued securities sold directly by the issuer. The secondary market provides liquidity, allowing investors to buy and sell previously issued securities.
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