Question

    The _____ (i)  is the segment of the market where

    companies raise funds by issuing new shares, while the _____ (ii)  is where previously issued securities are traded among investors. Together they are known as __________  (iii) . Choose the correct set of words for  (i), (ii), and (iii)  from the options below: 
    A Primary Market, Secondary Market, Capital Market Correct Answer Incorrect Answer
    B Capital Market, Derivatives Market, Financial Market Correct Answer Incorrect Answer
    C New market, Trading Market, Capital Market Correct Answer Incorrect Answer
    D Secondary Market, Commodity Market, Financial Market Correct Answer Incorrect Answer
    E Primary Market, Secondary Market, Equity Market Correct Answer Incorrect Answer

    Solution

    • Primary Market (i): Companies issue new shares and bonds to raise funds. 
    • Secondary Market (ii): Investors trade previously issued securities on stock exchanges. 
    • Capital Market (iii): The market for long term funds (more than 1 year) through instruements like equity shares and debentures/bonds. Its sub parts are primary and secondary markets 

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