When one shareholder sells equity directly to another the transaction is said to occur in the:
A)dealer market.
B)primary market.
C)secondary market.
D)OTC market.
E)NASDAQ market.

Question

Quizplus · Accepted Answer

The secondary market is where existing securities are traded among investors without the involvement of the issuing company. When a shareholder sells equity directly to another shareholder, it is not considered a primary market transaction because the company is not involved in the exchange. It is also not an OTC market transaction unless it occurs outside of a formal exchange. While it could potentially occur on the NASDAQ market if the stock is listed there, the term "NASDAQ market" is not specific enough to be the best answer. The dealer market typically refers to a market where market makers buy and sell securities for their own accounts, rather than directly matching buyers and sellers like in the secondary market, so it is not the best choice in this scenario.

When One Shareholder Sells Equity Directly to Another the Transaction