Distinguish between the Primary market and Secondary market.
Answers
hi
answer is given below.
In the Secondary Market, the price of the securities is determined by the demand and supply of the securities. If the demand for security is higher than its supply, then the price of the security will be high and vice-versa. On the other hand in the Primary Market, the price of the securities are not dependent on the demand and supply of the securities. In the Primary Market, they are traded at a fixed price.
In the Primary Market, the companies raise funds by issuing securities for fulfilling long-term financial goals such as expansion and diversification. In the Secondary Market, the issuing company has no involvement in the transaction.
In the Primary Market, the securities that are traded are first issue securities. This means they have never been issued However, in the Secondary Market, the securities that are traded are of the second hand in nature, this means they have been issued publicly before at least once in the Primary Market.
hope this will help you.
regards
NANBA...
The prices in the primary market are fixed whereas the prices vary in the secondary market depending upon the demand and supply of the traded securities. In the primary market, the investor can purchase shares directly from the company. In Secondary Market, investors buy and sell the stocks and bonds among themselves.