Question

Which of the following correctly describes the difference between the primary and secondary segments of the capital market?

Q: Answer-Which of the following correctly describes the difference between the primary and secondary segments...

As per the structural framework of financial markets, the primary market is the venue where new securities are created and sold to investors for the very first time such as through IPOs or Right Issues. The secondary market is a platform where previously issued securities are subsequently bought and sold among investors, typically after being listed on a stock exchange.

A The primary market deals exclusively with government securities, while the secondary market handles corporate securities.

B The primary market involves the issuance of brand-new securities, whereas the secondary market facilitates the trading of already issued and listed securities.

C The primary market only trades instruments with an indefinite maturity, while the secondary market trades long-term debt instruments.

D Financial intermediaries operate only in the primary market, while stock exchanges operate only in the secondary market.

E The primary market operates under SEBI regulations, while the secondary market is governed by the Reserve Bank of India.

Practice Next

Which of the following correctly describes the difference between the primary and secondary segments of the capital market?

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