NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Introduction to Securities Markets
In the Indian securities market, which segment is primarily used by companies to raise fresh capital by issuing new securities to investors?
The primary market is the segment where companies raise fresh capital by issuing new securities such as shares or bonds directly to investors. The secondary market only enables trading of existing securities between investors, and the issuer receives no new funds from those trades.
- APrimary marketCorrect
- BSecondary market
- CSpot currency market
- DOver-the-counter repo market
Explanation
The primary market is where new securities are issued by the issuer directly to investors, for example through an IPO or FPO. The secondary market only facilitates trading of securities already issued, so the issuer receives no fresh funds there.
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