Question

What is the difference between primary and secondary market

Need 100-120 words with atleast 1 refrences

Answer 1

Difference between primary and secondary market-

1. Primary market is deals with first time issue of stocks (IPO) to the general public for subscription. But secondary market means stock market or clearing house where securities are traded and final settlement will be done.
2. Prices are fixed in primary market, but in secondary market prices may vary due to market volatility.
3. Primary markets are direct due to new issues of shares. Secondary market is always indirect one due to many trading platforms and activities.
4. Primary market provides funds to the enterprises for expansion of business. But secondary market doesn't involve in funding business.
5. Intermediaries are underwriters in primary market. Secondary market deals with brokers.
6. A security can be sold only once in primary market. But in secondary market it can be sold multiple times in various portfolio.
7. Example- NYSE, BSE, NSE, NASDAQ, LSE all are belongs to secondary market stock exchange.

Reliance industries limited issue IPO of $ 2 million to general

Public during Q4 2018 is an example of primary market.

Thank you! All the best for your exam!