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Differentiate Between 'Primary Market' and 'Secondary Market' on Any Five Basis - Business Studies

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ConceptTypes of Financial Markets

Question

Differentiate between 'Primary Market' and 'Secondary Market' on any five basis

Solution

Basis of Difference Primary Market Secondary Market
Securities Traded Sale and purchase of newly issued securities take place in the primary market. Sale and purchase of already issued securities take place in the secondary market.
Issued by Securities are directly issued by companies. Securities are among investors, and hence, there is no involve
Price Prices are fixed by the company and its management. Prices are fixed by forces of
demand and supply.
Geographical Area No fixed place for a primary market. Fixed area and working hours under a secondary market.
Purchase and Sale Securities can only be purchased in the primary market. Securities can be both purchased and sold in the secondary market
Capital Formation Directly promoted funds from savers to investors are directly channelised for productive purpose. Indirectly promoted because the liquidity of securities is augmented.

 

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Solution Differentiate Between 'Primary Market' and 'Secondary Market' on Any Five Basis Concept: Types of Financial Markets.
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