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Question

Which of the following is not a feature of a primary market?

A Issuance of new securities Correct Answer Incorrect Answer
B Trading of existing securities Correct Answer Incorrect Answer
C Direct transaction between issuers and investors Correct Answer Incorrect Answer
D Fixed pricing of securities Correct Answer Incorrect Answer
E All are features of it Correct Answer Incorrect Answer

Solution

The primary market is the market for new securities issuance where companies raise capital by issuing new securities such as equity shares, bonds, and debentures. The primary market is characterized by direct transactions between issuers and investors, and the pricing of securities is based on factors such as demand and supply and the intrinsic value of the securities. Unlike the secondary market, the primary market is not involved in the trading of existing securities. Hence, option B is not a feature of the primary market.

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