Firms that issue securities receive financial capital from the sale of these securities when they are sold on the primary market, but not when they are sold on the secondary market.

Question

Quizplus · Accepted Answer

In the primary market, firms issue new securities and receive financial capital directly from investors who buy these securities. In the secondary market, securities are traded among investors, and the firm that originally issued the securities does not receive any of the proceeds from these sales.

Firms That Issue Securities Receive Financial Capital from the Sale