Which market is defined by trading currently outstanding securities?

The correct answer is the Secondary Market because this market is specifically where existing, or outstanding, securities are bought and sold among investors. In the secondary market, the transactions do not involve the issuing companies; instead, they facilitate the trade between investors after the original sale of the securities has occurred. This allows for liquidity, as investors can convert their holdings into cash by selling to other market participants.

In contrast, the primary market is where new securities are created and sold for the first time, typically through an initial public offering (IPO). The money market involves short-term debt instruments with maturities of one year or less, focusing on low-risk financial instruments, rather than the trading of existing securities. The capital market encompasses both the primary and secondary markets; however, it is a broader term that includes long-term securities. Therefore, focusing on the defining characteristic of trading currently outstanding securities clearly identifies the secondary market as the correct answer.