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NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Securities Market

An investor wants to buy shares of a company already listed on the NSE from other investors. This transaction takes place in which market?

The transaction takes place in the secondary market. Shares already issued and listed are traded between investors on the exchange, and the issuing company receives no fresh capital from these trades, unlike primary market issues such as IPOs or rights issues.

  1. APrimary market through an IPO
  2. BSecondary marketCorrect
  3. CPrimary market through a rights issue
  4. DMoney market

Explanation

Trading of already issued and listed securities between investors occurs in the secondary market on the stock exchange. The company receives no fresh funds from such trades. IPOs and rights issues are primary market routes, and the money market deals in short-term debt.

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