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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments

In the Indian securities market, which of the following correctly describes the primary market?

The primary market is where an issuer sells securities for the first time to raise funds, such as through an IPO. Trading of already-issued securities among investors takes place in the secondary market, not the primary market.

  1. AA market where existing securities are traded between investors on a stock exchange
  2. BA market where securities are issued for the first time by an issuer to raise fundsCorrect
  3. CA market where only derivative contracts are traded
  4. DA market where only government securities are exchanged between banks

Explanation

The primary market is where new securities are issued directly by the issuer to raise capital, for example through an IPO or FPO. Trading of already-issued securities between investors takes place in the secondary market, so the first option is wrong.

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