Question

State the essential functions of primary market

Answer 1

Answer:

The main function of the primary market is capital formation for the likes of companies, governments, institutions etc. ... The companies raise money in the primary market through securities such as shares, debentures, loans and deposits, preference shares etc.

Answer 2

The essential functions of primary market is to create an increase in capital growth by the process of investments and other forms of financial transactions

Explanation:

• The main function of primary market increase the growth of capital by investments through bonds, stocks and currencies. They encourage the business houses to bring out new stocks for raising money for business.
• Primary markets help the business entities to raise money by issuing shares through bonds or by the process of common stocks. The organisations can also benefit from the methods of raising public issues and right issues to meet their financial obligations
• There are mainly investment banks, institutions, corporations  and the public accounting firms who form the main part of the primary market. The secondary market consists of sellers and buyers and the banks.

To know more about primary market

Difference between primary market and  secondary market

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