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Distinguish between the following.Primary market and Secondary market. - Secretarial Practice

Distinguish Between

Distinguish between the following.
Primary market and Secondary market

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Solution

  Primary Market Secondary Market
1) Meaning The issue of new shares by the company is done in the primary market. The securities issued earlier are traded in the secondary market.
2) Mode of investment The securities are acquired directly from the company. It involves direct investment in securities. The securities are acquired from other stakeholders. It involves indirect investment in securities.
3) Parties in action The parties dealing in this market are companies and investors. The parties dealing in this market are only investors.
4) Intermediary The underwriters are the intermediaries. The security brokers are the intermediaries.
5) Value of security The price of a security in the primary market is fixed as it is decided by the company. The price of a security is fluctuating, depending on the demand and supply conditions in the market
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APPEARS IN

Balbharati Secretarial Practice 12th Standard HSC Maharashtra State Board
Chapter 11 Financial Market
Exercise | Q 4.1 | Page 169
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