ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Many common stocks are traded over-the-counter, although the largest corporations usually have their shares traded at organized stock exchanges such as the New York Stock Exchange.
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As a corporation gets a share of the broker’s commission, a corporation acquires new funds whenever its securities are sold.
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Capital market securities are usually more widely traded than shorter-term securities and so tend to be more liquid.
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Prices of capital market securities are usually more stable than prices of money market securities, and so are often used to hold temporary surplus funds of corporations.
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Detailed explanation-1: -They work as an intermediary between the savers and the investors by mobilising funds between them.
Detailed explanation-2: -Primary Market When a company publicly sells new stocks or bonds for the first time, such as in an initial public offering (IPO), it does so in the primary capital market. This market is sometimes called the new issues 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: -The characteristic of the Financial Market are that Financial markets have traits like offering security for deals in financial assets and assuring liquidity by providing ways to sell financial assets.