Madelyn Inc. ,an automobile company,decides to expand its operation abroad by setting up three new manufacturing plants.Since enough funds were not available for this expansion process,Madelyn decides to list its company on its national stock exchange and issue securities for raising additional capital.The market for Madelyn's securities can be described as a ______ market.

Question

Quizplus · Accepted Answer

A primary market is where securities are issued by the company for the first time to raise capital, which is the case with Madelyn Inc. establishing itself in the stock exchange and issuing securities to raise capital for expansion. A secondary market involves the sale and purchase of already issued securities between investors, which does not apply in this scenario. Insider markets refer to a situation where certain individuals have prior knowledge about the company's affairs and trade securities accordingly, which is not the case here. A limit order is a type of order placed by an investor to buy or sell securities at a specific price or better, which is not relevant in this context.