Question

An example of a secondary market transaction involving a capital market security is A. a new issue of a security with a very long maturity. B. the transfer of a previouslyminusissued security with a very long maturity. C. a new issue of a security with a very short maturity. D. the transfer of a previouslyminusissued security with a very short maturity.

Answer 1

Answer:

B. the transfer of a previously-issued security with a very long maturity

Explanation:

The secondary market is a  market were securities previously bought directly from the original issuer can be traded or exchanged i.e. transferred to other interested investors for a consideration. Apart from stocks, other securities that can be bought and sold in the secondary market are bonds, options, and futures.

The words follow on public offering and aftermarket are also used interchangeably with secondary market. New issues are traded on the primary market.