Financial Markets · Class 12 · CBSE · Commerce Business Studies
A company offers its shares to the public for the first time to raise fresh capital. In which market does this transaction take place?
Practice question from Financial Markets (Class 12 · CBSE · Commerce Business Studies), with the correct answer and a step-by-step solution.
medium · MCQ · Q-590D63
A company offers its shares to the public for the first time to raise fresh capital. In which market does this transaction take place?
- A.Secondary market
- B.Money market
- C.Primary marketCorrect answer
- D.Foreign exchange market
Solution
The primary market deals with the issue of new securities by companies or governments to raise funds. Since the company is issuing shares for the first time and receiving fresh capital, the transaction occurs in the primary market.
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