What issue could arise from selling shares in a secondary market?

Selling shares in a secondary market can lead to potential capital gains taxation, and this is the reason why that choice is correct. When an investor sells shares for a higher price than the purchase price, the profit realized from this transaction is subject to capital gains tax. Thus, if the value of the shares has appreciated since the time of purchase, the seller might face a tax liability based on that gain, impacting their overall return on investment.

Additionally, it’s important to understand the nature of secondary markets in relation to the other choices. Increased market liquidity relates to the ease with which shares can be bought and sold, a characteristic of secondary markets rather than a drawback. A guaranteed selling price does not exist in secondary markets as prices fluctuate based on supply and demand dynamics. While efforts are often made to provide all investors with access to purchase or sell stocks, the reality of market conditions can result in unequal access due to various factors such as timing and market knowledge.

Therefore, the potential for capital gains taxation is a significant consideration for investors transacting in secondary markets and emphasizes the financial implications of selling shares at a profit.