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:

Purchase Returns

Goods returned by the buyer to the seller, usually because they are defective or not as per the order placed.

Freight In

A cost associated with transporting goods into a business, often included in the cost of goods sold because it directly relates to the cost of bringing inventory to the business.

Contra Account

An account used in the general ledger to reduce the value of a related account without adjusting the original account directly.

Sales Returns

Transactions where customers return previously purchased merchandise, resulting in a refund or credit.