Bonds and Financial Assets Quick Check

Question

4 of 54 of 5 Items
Question
Which of the following is an example of a bond being traded on the secondary market?(1 point)
Responses

an investor purchases a bond from a corporation
an investor purchases a bond from a corporation

an investor purchases a bond from the U.S. Treasury
an investor purchases a bond from the U.S. Treasury

an investor sells a bond to another investor
an investor sells a bond to another investor

an investor purchases a bond directly from a municipality

Answer 1

The correct response is:

an investor sells a bond to another investor

This option exemplifies a bond being traded on the secondary market, where existing bonds are bought and sold among investors rather than being issued directly by the originating entity.