Why Is a Stock Exchange Like NASDAQ Considered a Secondary

question 13

Multiple Choice

Why is a stock exchange like NASDAQ considered a secondary market?

• A) It trades the second largest volume of shares in the world.
• B) Shares sold on it are exchanged between investors without any involvement of the issuing corporation.
• C) The exchange has rules that attempt to ensure that bid and ask prices do not get too far apart.
• D) NASDAQ is called a secondary market because NYSE is considered a primary market.

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Definitions:

Opportunity Cost

The cost of foregoing the next best alternative when making a decision, highlighting the trade-offs involved.

Interest

The cost of borrowing money, typically expressed as a percentage of the amount borrowed, paid by the borrower to the lender for the use of their funds.

Expected Profit Rate

The forecasted return on investment, predicting the percentage of profit relative to costs.

Investment

The allocation of resources or capital to create profit in the future.