Question

Paula wants to buy stocks in a publicly traded company that deals in networking equipment. However, the company is not listed on any of the major stock exchanges. Paula should, therefore, purchase the stocks of the company in the _____.

Answer 1

In this case,Paula should purchase the stocks of the company in the Over the Counter(OTC) market.

Step-by-step explanation:

In Finance,OTC markets refers to the market for financial assets and securities in which the stocks or shares of companies that are unlisted in the mainstream formal stock exchange markets are bought and sold.Hence,the unlisted stocks or shares and financial securities are traded in the OTC market by various private dealers,investors and facilitators.The OTC market basically trades the shares and financial securities of small scale and relatively new companies or firms that are not willing to list their shares or financial assets in the formal stock exchange markets due to various factors such as high market capitalization requirements or listing fees and other commissions associated with official exchange of stocks.Therefore,these types of unlisted stocks or financial securities are commonly listed and traded in the OTC market.