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Question
Explain the following term/concept.
Primary market
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Solution
- In the primary market, companies sell their shares, debentures, etc. for the first time to raise fresh capital. The primary market, also known as the new issues market, solely handles the issuance of new securities.
- The main function of the primary market is to facilitate capital formation. It is a place where investors can invest their surplus funds profitably and companies can raise capital easily. On the basis of the type of funds raised, Primary market can be classified as Equity market and Debt market. In Equity market, securities like Equity shares, Preference Shares, Rights Issue, etc. are issued. In Debt market, debentures, bonds, fixed deposits, etc. are issued.
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RELATED QUESTIONS
Select the correct answer from the possible choices given below and rewrite the statement :
A market where existing securities are resold or traded in called ______ market.
Complete the sentence.
New shares, debentures, etc. are traded in ____________ market.
Answer in one sentence.
What is new issue market?
Correct the underlined word/s and rewrite the following sentence.
In Primary market, already existing securities are traded.
Correct the underlined word/s and rewrite the following sentence.
Companies sell fresh shares for the first time to the public in the secondary market.
Explain the features of Capital Market.
State whether the following statement is True or False:
The securities market is an unorganized marketplace in India.
Distinguish between the following:
Primary market and Secondary market
A security market in which new issues of securities are arranged or organised is called ______ Market.
______ is the net addition to the existing stock of an economy's capital.
