A competent U.S. financial manager must understand the way U.S. stock markets ar

Question

A competent U.S. financial manager must understand the way U.S. stock markets are structured and operate. In the United States, the stock markets consist of primary markets, secondary markets, listed security exchanges, over-the-counter markets, as well as the regulations that monitor these markets.

In what market do most U.S. stock market transactions occur?

...The secondary market

...The primary market

_____________ act as agents for investors who want to buy or sell stocks.

True or False: One of the major differences between the New York Stock Exchange (NYSE) and the over-the-counter (OTC) markets is that in the NYSE, designated market markers make markets and floor brokers act as agents for their customers, while in the OTC, dealers make markets and brokers act as agents for their customers.

...True

...False

Explanation / Answer

A majority of US stock market transactions occur in the secondary market because that is the market where securities are sold and bought (traded) post their listing. Primary markets are only for the initial listing whereas over-the-counter markets are for large institutional block deals, thereby both lacking in regular steady liquidity. However, secondary markets on account of being the destination of all listed securities and their subsequent trade are rich in steady regular sustained liquidity, thereby attracting a lion's share of US stock market transactions.

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