Financial Markets · Class 12 · CBSE · Commerce Business Studies
Differentiate between the primary market and the secondary market on the basis of the nature of transactions and the flow of funds.
Practice question from Financial Markets (Class 12 · CBSE · Commerce Business Studies), with the correct answer and a step-by-step solution.
medium · Subjective · Q-E5B12E
Differentiate between the primary market and the secondary market on the basis of the nature of transactions and the flow of funds.
Solution
The key distinction is that the primary market creates and sells new securities, while the secondary market facilitates trading in securities that have already been issued. Funds raised in the primary market go to the issuer; in the secondary market, funds generally pass between buyers and sellers.
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