The difference between a primary market and a secondary market is
A)primary market is the stock market and secondary market is the market for second hand sale of securities
B)a primary market helps in long-term credit and secondary market offers short-term credit
C)a primary market helps in the issue of new securities those which are offered for the first time and the secondary market is for second hand sale of securities listed on the stock exchange
D)a primary market is the unorganized sector and the secondary market is the organized sector for sale and purchase of securities.

Question

Quizplus · Accepted Answer

In a primary market, new securities are issued for the first time to investors, allowing companies to raise capital directly from investors. The secondary market, on the other hand, involves the buying and selling of existing securities among investors, without the issuing companies directly involved in the transactions. This distinction highlights the primary market's role in initial capital formation and the secondary market's role in providing liquidity and price discovery for existing securities.

The Difference Between a Primary Market and a Secondary Market