Q. With reference to the Capital Market, consider the following statements:
1.The price of securities in the Primary Market is determined by the issuing company, whereas in the Secondary Market it is driven by market demand and supply.
2.Investors can only buy securities in the Primary Market, while they can both buy and sell in the Secondary Market.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation:
- In the Primary Market, the issuing company sets the price of the securities (often with help from merchant bankers). In the Secondary Market, prices fluctuate based on market forces—i.e., demand and supply.
- In the Primary Market, investors can only buy securities directly from the issuer. In the Secondary Market, investors are free to buy and sell among themselves through stock exchanges.
Source- 11th NCERT: Economics: Indian Economic Development and TMH Indian Economy by Ramesh Singh
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