CS Executive · Capital Market and Securities Laws · Basics of Capital Market
Meera, a retail investor, buys 200 shares of a listed company directly from another investor through a stock exchange platform, with no fresh shares issued by the company. In which segment of the capital market has this transaction taken place?
The transaction is in the secondary market. Shares that were already issued are being traded between investors on an exchange, and the company raises no new money. The primary market is where securities are first issued by the company to investors.
- APrimary market
- BSecondary marketCorrect
- CMoney market
- DForeign exchange market
Explanation
Trading of already issued securities among investors on an exchange takes place in the secondary market. The company receives no fresh funds from such a trade. The primary market deals only with new issues made by the issuer, so option A is wrong.
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