NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market
Mrs. Sunita Joshi bought 100 shares of a listed company from another investor through a stock exchange. This transaction takes place in which market?
The purchase takes place in the secondary market because existing listed shares are being traded between investors on a stock exchange. The company does not receive any fresh funds, which distinguishes it from primary market issues.
- ASecondary marketCorrect
- BPrimary market
- CPrivate placement market
- DUnlisted over-the-counter issue market
Explanation
Buying existing shares from another investor on an exchange is trading of already issued securities, which is the secondary market. No fresh capital reaches the company, so it is not a primary market transaction.
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