Consider the following statements:
1. The primary market provides entities with access to funding necessary for growth and development.
2. The secondary market allows investors to trade previously issued securities, and plays a vital role in enhancing liquidity.

Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 and 2

Question

Consider the following statements:
1. The primary market provides entities with access to funding necessary for growth and development.
2. The secondary market allows investors to trade previously issued securities, and plays a vital role in enhancing liquidity.

Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 and 2

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: The primary market provides entities with access to funding necessary for growth and development. It facilitates economic expansion by letting companies raise capital through equity or debt offerings.

Statement 2 is correct: The secondary market involves the buying and selling of existing securities (that were previously issued in the primary market). It provides liquidity, meaning investors can easily enter or exit investments by buying/selling. This continuous trading also helps in price discovery and reflects market sentiment.

Financial Markets

Primary and Secondary Markets

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M Question 1	⏱ 0
Consider the following statements: 1. The primary market provides entities with access to funding necessary for growth and development. 2. The secondary market allows investors to trade previously issued securities, and plays a vital role in enhancing liquidity. Which of the statement(s) given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 and 2