A secondary market transaction involves the trading of previously issued securities between investors. The issuing entity is not a participant in these transactions, and the proceeds from the sale go to the selling investor, not the issuer. A registered securities exchange, such as the New York Stock Exchange (NYSE) or Nasdaq, is a formal marketplace established for the purpose of facilitating such secondary market trades. These exchanges provide liquidity, allowing investors to buy and sell securities with ease.

A. Buying open-end mutual fund shares is a primary market transaction, as new shares are purchased directly from the fund (the issuer).

B. Buying securities directly from the issuing company is the definition of a primary market transaction, where the company receives capital from the sale.

D. A private placement is a type of primary market offering where new securities are sold to a select group of investors, not the general public.

1. FINRA Securities Industry Essentials (SIE) Examination Content Outline. Section 1.1, "Knowledge of Capital Markets," distinguishes between the primary market (where issuers sell securities to raise capital) and the secondary market (where securities trade between investors). It identifies exchanges and the over-the-counter (OTC) market as components of the secondary market.

2. Bodie, Z., Kane, A., & Marcus, A. J. (2021). Investments (12th ed.). McGraw-Hill Education. In Chapter 3, "How Securities Are Traded," Section 3.1, "How Firms Issue Securities," the text defines the secondary market as the venue for trading existing securities among investors, explicitly citing organized exchanges like the NYSE as examples.

3. Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management (15th ed.). Cengage Learning. Chapter 2, "Financial Markets and Institutions," clarifies that secondary markets are where "already outstanding" securities are traded. It contrasts this with primary market transactions, such as new issues and private placements, where the corporation is raising new capital.