Skip to content

NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market

A retail investor buys 100 shares on the exchange and wants to know the nature of this transaction. Which describes it correctly?

It is a secondary market transaction, because the investor buys already issued, listed shares through the exchange from another investor. The issuer raises no fresh funds, and fast settlement does not make it a money market or private placement deal.

  1. AA primary market transaction because shares are being bought
  2. BA secondary market transaction because already listed shares are traded on the exchangeCorrect
  3. CA money market transaction because it settles quickly
  4. DA private placement because only one investor is involved

Explanation

Buying listed shares on the exchange is trading in already issued securities, which is the secondary market. Settlement speed does not make it a money market deal, and private placement refers to issuer allotment to select investors.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to the Securities Market shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to the Securities MarketFree diagnostic mock

More Introduction to the Securities Market questions