NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Securities Market Segments
In the Indian securities market, which of the following is the primary function of the primary market segment?
The primary market exists for issuers to raise fresh capital by issuing new securities to investors, for example through an IPO, rights issue or private placement. Trading of already issued securities between investors happens in the secondary market, not the primary market.
- ATrading of already issued shares between investors
- BRaising fresh capital by issuers through the issue of new securitiesCorrect
- CSettlement of futures contracts on the stock exchange
- DProviding a platform for trading only in government securities
Explanation
The primary market is where securities are issued for the first time to raise capital, for example through an IPO, FPO, rights issue or private placement. Trading of already issued securities takes place in the secondary market, so the other options describe different segments.
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