Consolidated Cocoa Inc., a large chocolate manufacturing company, sells its shares directly to the public at $50 per share. Ron purchases 100 shares of the company. When the price of the shares goes up to $60, Ron decides to sell 50 shares. He approaches a broker who sells these shares to John at $60. This resale of the shares by the broker represents a sale in the _____ market.

Question

Quizplus · Accepted Answer

The resale of shares by Ron through the broker to John represents a secondary market transaction. In the secondary market, existing securities are bought and sold among investors, whereas in the primary market, newly issued securities are sold to the public. Reverse takeover, initial public offering, and stock market launch are not relevant in this scenario.