Stock exchange market deals with

Step 1: Analyze the question The question asks what the stock exchange market deals with. The stock exchange (in Nigeria, the Nigerian Exchange Group, NGX, formerly the Nigerian Stock Exchange) is a financial market, so we need the option that describes its main function.

Step 2: Explain the concept Financial markets are split into two parts:

• Primary market: where new securities (shares, bonds) are issued for the first time, for example through an IPO or public offer.
• Secondary market: where securities that have already been issued are bought and sold among investors. The stock exchange is the secondary market.

Because the shares and bonds being traded have already been issued before, they are described as "second-hand securities". The stock exchange also helps companies raise long-term capital, and it gives investors liquidity, meaning they can easily sell their shares.

Step 3: Evaluate the options

• A. Sales of second-hand securities: Correct. This is the core function of the stock exchange, the trading of existing shares, stocks and bonds.
• B. Sales of foreign exchange: Incorrect. This is the foreign exchange market (forex market), which deals in currencies.
• C. Exchange of stock fish for stock: Incorrect. This is a distractor that plays on the word "stock". Stockfish is a dried fish and has nothing to do with securities.
• D. Exchange of treasury bills: Incorrect. Treasury bills are short-term government securities traded in the money market, not the stock exchange, which deals mainly in long-term securities.

Step 4: Answer The stock exchange deals with the sale of second-hand (already issued) securities.

Exam tip: Remember "Stock exchange = secondary market = second-hand securities." Also match the market to its product: forex market → currencies, money market → short-term instruments like treasury bills, capital market (stock exchange) → long-term securities such as shares and bonds.