BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Tertiary markets
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Primary markets
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Secondary markets
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None of the above
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Detailed explanation-1: -In the primary market, new stocks and bonds are sold to the public for the first time. In a primary market, investors are able to purchase securities directly from the issuer.
Detailed explanation-2: -In the primary market, investors have an option to purchase the shares directly from the company, whereas in the secondary market, the investors buy and sell the securities among themselves.
Detailed explanation-3: -The primary market may also be called the New Issue Market (NIM). In the primary market, securities are directly issued by companies to investors. Securities are issued either by an Initial Public Offer (IPO) or a Further Public Offer (FPO).
Detailed explanation-4: -A broker typically purchases the securities on behalf of an investor in the secondary market. Unlike the primary market, where prices are set before an IPO takes place, prices on the secondary market fluctuate with demand.
Detailed explanation-5: -The primary market is where securities are created. It’s in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.