You recently sold 200 shares of Disney stock, and the transfer was made through a broker. This is an example of:

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The scenario describes selling 200 shares of Disney stock that were transferred through a broker, which points to trading existing shares among investors after the initial issue has been sold. 
Option 1: 'A money market transaction.' Money market deals with short-term debt instruments, not equity shares, so this is not accurate for stock trading. 
Option 2: 'A primary market transaction.' The primary market involves new securities being issued by the company to raise capital (e.g., an initial public offering or follow-on offering). Since the shares being traded are already outstanding, this is not a primary issue. 
Option 3: 'A secondary market transaction.' This is the correct classification: after the stock has been issued, investors trade among themselves, with brokers facilitating these transactions on exchanges or via the market. 
Option 4: 'A futures market transaction.' Futures contracts are derivative instruments based on an underlying asset, such as commodities or indices, not the sale of actual equity shares, so this does not describe the scenario. 
Option 5: 'An over-the-counter market transaction.' While some stock trades can occur OTC, Disney is a major public company whose stock trades primarily on formal exchanges; the key element here is that the transfer involves selling existing shares through a broker in the secondary market, not specifically an OTC transaction. Therefore, this option is misleading in this context.

Business Finance Chapter 02 Quiz

You recently sold 200 shares of Disney stock, and the transfer was made through a broker. This is an example of:

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Investors trade previously issued securities in the ________ market(s).

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