In which market do investors buy and sell existing securities?

In which market do investors buy and sell existing securities?

• A. Commodities market
• B. Primary market
• C. Secondary market
• D. Over-the-counter market

Answer: (C)

The correct choice indicates the market where investors engage in buying and selling existing securities, which is defined as the secondary market. In this market, transactions occur between investors rather than involving the issuing companies directly. New securities are created and sold for the first time in the primary market, so it does not pertain to the trading of securities post-issuance. The over-the-counter market refers to trading that occurs outside of formal exchanges, where securities are dealt in smaller, often less regulated venues, which can include both existing and new securities but isn't specifically designated just for existing ones. The commodities market primarily focuses on trading physical goods and commodities rather than financial securities. Thus, the secondary market is specifically designated for transactions involving existing securities, making it the appropriate choice in this context.

The correct choice indicates the market where investors engage in buying and selling existing securities, which is defined as the secondary market. In this market, transactions occur between investors rather than involving the issuing companies directly.

New securities are created and sold for the first time in the primary market, so it does not pertain to the trading of securities post-issuance. The over-the-counter market refers to trading that occurs outside of formal exchanges, where securities are dealt in smaller, often less regulated venues, which can include both existing and new securities but isn't specifically designated just for existing ones. The commodities market primarily focuses on trading physical goods and commodities rather than financial securities.

Thus, the secondary market is specifically designated for transactions involving existing securities, making it the appropriate choice in this context.