ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Primary market is also known as New Issue Market as in this market only new companies can issue their securities and buyers have only buying option.

Detailed explanation-2: -This new issue can be an Initial Public Offering (IPO) of a company or it can be a new issue floated by an organization that has floated many such issues in the past. The market that deals with these new issues is known as the new issue market.

Detailed explanation-3: -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.

Detailed explanation-4: -There are 5 types of primary market issues. Public issue is the most common method of issuing securities of a company to the public at large. It is mainly done via Initial Public Offering (IPO) resulting in companies raising funds from the capital market. These securities are listed in the stock exchanges for trading.

Detailed explanation-5: -The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.