Which market is for securities that have previously been sold by the issuer?

Prepare for the CSI Investment Funds in Canada exam with flashcards and multiple choice questions. Gain insights through hints and explanations for a successful exam experience!

Multiple Choice

Which market is for securities that have previously been sold by the issuer?

Trading of securities after they have been issued is done in the secondary market. This is where investors buy and sell existing shares among themselves, providing liquidity and helping establish current prices. The issuer doesn’t receive funds from these trades, since the money goes from one investor to another. The primary market, by contrast, is where new issues are sold to raise capital. The terms exchange or over-the-counter describe venues for trading, but they’re about where trades occur, not whether the securities have been previously issued.

Trading of securities after they have been issued is done in the secondary market. This is where investors buy and sell existing shares among themselves, providing liquidity and helping establish current prices. The issuer doesn’t receive funds from these trades, since the money goes from one investor to another. The primary market, by contrast, is where new issues are sold to raise capital. The terms exchange or over-the-counter describe venues for trading, but they’re about where trades occur, not whether the securities have been previously issued.

More practice questions