What is a difference between primary and secondary markets?
A) In secondary markets, investors trade with companies that issue stocks and bonds; whereas in primary markets, investors can trade their securities with other investors.
B) Primary market transactions raise cash for the issuing corporations, whereas secondary market transactions do not.
C) Primary markets include stock exchanges and over-the-counter markets, while secondary markets are where firms raise financial capital.
D) Primary markets are private, while secondary markets are public.
E) Primary markets allow investors to trade with other investors, while secondary markets allow corporations to sell new issues of stocks and bonds directly to the public and to institutions.

Question

Quizplus · Accepted Answer

Primary market transactions actually raise cash for the issuing corporations, while secondary market transactions do not. Secondary markets are stock exchanges and over-the-counter markets where investors can trade their securities with other investors rather than the company that issued the stock or bonds. New issues of stocks and bonds are sold directly to the public and to institutions in what is known as the primary market-the market where firms raise financial capital.

What Is a Difference Between Primary and Secondary Markets