NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Introduction to the Indian Financial Markets
Which of the following best describes the primary market in the Indian securities market?
The primary market is where issuers raise fresh capital by issuing new securities, for example through an IPO, and the proceeds go to the issuer. Trading of already issued securities between investors takes place in the secondary market, not the primary market.
- AMarket where existing securities are traded between investors on a stock exchange
- BMarket where issuers raise fresh capital by issuing securities to investorsCorrect
- CMarket where only derivatives contracts are traded
- DMarket where only government securities are bought back by the RBI
Explanation
The primary market deals with new issues, such as IPOs, where the issuer receives the funds. Trading of already issued securities occurs in the secondary market.
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