NISM Certifications · NISM-Series-VI: Depository Operations · Introduction to the Indian Capital Market
Ms. Kavita Nair wants to know which type of securities market institution is the place where companies first issue new shares to investors for raising fresh capital. Which market is this?
The primary market is where companies issue securities for the first time to raise fresh capital, such as through an IPO or a rights issue. The secondary market, by contrast, only facilitates trading of already issued securities among investors.
- APrimary marketCorrect
- BSecondary market
- CMoney market
- DForward market
Explanation
New securities are issued for the first time to raise capital in the primary market, for example through an IPO. The secondary market only handles trading of securities already issued, so it does not raise fresh capital for the issuer.
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