Question

State any four functions of 'Secondary - Market'.

Answer 1

The four functions of secondary market are enlisted below.

1. One of the basic functions of secondary market is to provide liquidity and marketability to the already existing financial assets and securities. It provides a ready platform for the trading of existing securities.
2. It enables a constant valuation of the securities and helps in building the demand and supply. In this way, it helps in determining the price of the securities.
3. It ensures safety and fairness in transactions.
4. It provides a platform for channelising the savings to the most productive use. In this way, it facilitates growth and development of the economy.