You recently sold 500 shares of Netflix stock, and the transfer was made through a broker. This is an example of:a.A secondary market transaction.b.A primary market transaction.c.A derivatives market transaction.d.None of them.e.A money market transaction.
Question
You recently sold 500 shares of Netflix stock, and the transfer was made through a broker. This is an example of:a.A secondary market transaction.b.A primary market transaction.c.A derivatives market transaction.d.None of them.e.A money market transaction.
Solution
This is an example of a secondary market transaction. In the secondary market, investors trade securities without the involvement of the issuing companies. Therefore, when you sold your Netflix shares through a broker, you were participating in the secondary market. So, the correct answer is a. A secondary market transaction.
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