Chartered Alternative Investment Analyst Association (CAIA) Exam 2025 – 400 Free Practice Questions to Pass the Exam

Image Description

Question: 1 / 400

What is the key feature of the secondary market?

Trading of initial shares

Direct transactions between institutions

Buying and selling of previously issued securities

The key feature of the secondary market is the buying and selling of previously issued securities. This market facilitates transactions among investors who are trading securities that have already been issued in the primary market. In essence, the secondary market provides liquidity to investors, allowing them to adjust their portfolios and exit positions without needing to wait for a new issuance.

In the secondary market, securities are sold between investors, which can include stocks, bonds, and other financial instruments. This contrasts with the primary market, where securities are created and sold for the first time. The presence of a secondary market is essential for enabling price discovery and providing an ongoing valuation for securities based on supply and demand dynamics.

Get further explanation with Examzify DeepDiveBeta

Exchange of currency for securities

Next Question

Report this question

Download Chartered Alternative Investment Analyst Association (CAIA) Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy