ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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primary market by an investment bank.
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primary market by a stock exchange broker.
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secondary market by a securities dealer.
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secondary market by a commercial bank.
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Detailed explanation-1: -Explanation: A corporation will acquire new funds only when the securities are sold in the primary market by an investment bank. If they are sold by a stock exchange broker then there is a broker who is the middle man between the corporation and the investors. This would not result in the corporation having new funds.
Detailed explanation-2: -The primary market is where companies issue a new security, not previously traded on any exchange. A company offers securities to the general public to raise funds to finance its long-term goals. The primary market may also be called the New Issue Market (NIM).
Detailed explanation-3: -An initial public offering, or IPO, is an example of a security issued on a primary market. An IPO occurs when a private company sells shares of stock to the public for the first time, a process known as “going public."
Detailed explanation-4: -Capital Market: Capital market is a market for long-term debt and equity shares. In this market, the capital funds comprising of both equity and debt are issued and traded. This also includes private placement sources of debt and equity as well as organized markets like stock exchanges.
Detailed explanation-5: -A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold.