Trading Status of 30-Year Bond by Gary's Plaid Pants Warehouse, Inc.

D

The correct answer is D. Secondary capital market.

A bond is a debt instrument that is issued by a company or government entity to raise capital. When a bond is first issued, it is sold in the primary market to investors, who provide the initial funding for the issuer. However, after the initial sale, the bond can be bought and sold by investors in the secondary market.

The secondary market is where previously issued securities, such as bonds, are bought and sold among investors. In this market, buyers and sellers come together to trade securities, and the prices of securities are determined by supply and demand. Investors who want to sell their bonds can do so in the secondary market, while buyers can purchase these bonds.

In the case of the 30-year bond issued by Gary's Plaid Pants Warehouse, Inc. in 1997, the bond is now 26 years old (as of 2023), which means it has been trading in the secondary market for many years. As a result, the bond would now trade in the secondary capital market, not the primary capital market, which is where new securities are issued and sold for the first time.

Additionally, the bond would not trade in the primary or secondary money markets. The primary money market is where short-term debt securities, such as treasury bills and commercial paper, are bought and sold by investors. The secondary money market is where these same securities are traded after their initial issuance. However, bonds are long-term securities and do not typically trade in these markets.

In summary, the 30-year bond issued by Gary's Plaid Pants Warehouse, Inc. in 1997 would now trade in the secondary capital market.