Question

4. Primary markets and secondary markets are interdependent
Explain this interdependence of the two markets with the help of
examples.​

Answer 1

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Securities market can be defined as the market, whereby financial instruments, obligations, and claims are available for sale. It is classified into two interdependent segments, i.e. Primary Market and Secondary Market. The former is a market where securities are offered for the first time for receiving public subscription while the latter is a place where pre-issued securities are dealt between the investors.

While primary market offers avenues for selling new securities to the investors, the secondary market is the market dealing in securities that are already issued by the company. Before investing your hard-earned money in financial assets like shares, debenture, commodities etc, one should know the difference between primary market and secondary market, to have better utilization of savings.

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