Question

“Because corporations do not actually raise any funds in secondary markets, they are less important to the economy than primary markets.” Comment.

Answer 1

Answer:

Yes,

Primary markets are place where the securities are issued for the first time and funds are raised by the companies. Secondary markets are place where the securities and assets are resold.

Secondary markets are important for the economy. When a security is bought and sold in the secondary market, the company does not get any additional funds. The individual selling the security is benefited from the trade.

So they are less important in economy than primary markets.

Thanks!!!