FINRA SIE Question Answer
Which of the following responses accurately describes a secondary market transaction?
Buying open-end mutual fund shares
Buying securities directly from the issuing company
Buying securities on a registered securities exchange
Buying securities in a private placement from a broker-dealer
A secondary market transaction occurs when securities are bought and sold between investors, typically on an exchange.
C is correct because securities purchased on a registered exchange are secondary market transactions.
A is incorrect as open-end mutual fund shares are purchased directly from the issuer.
B refers to the primary market.
D is also incorrect as private placements occur in the primary market.
TESTED 13 Jan 2026
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