Question

Question 4

1. “It is necessary to understand the different securities markets around the world and the changes that are occurring” – Expound

1. Market and Characteristics of a Good Market

1. Primary Capital Market and
2. Secondary Financial Market.

Answer 1

1Market is a place .where two parties can gether to facilitate the exchange of goods and services.

Fianancial Market refers to any place where securities,cuurencies,bonds and other securities are traded between two parties.

Securities market is a component of the financial markets where securities are traded between two parties on the basis of demand and supply.

Characteristics of good market:

A good market is one where in which security prices adjust rapidly to the arrival of new information nad therefore the current price of securities reflect all information about the securities.

A good market has lower transaction cost.

2.Primary Capital Market

Primary capital market deals with the issue of new securities.When a company publically sells new stocks and bonds for first the first time,it does so in the primary capital market

3.Secondary Financial Market

It is financial market where priviously issued securities and financial instruments such as stock,bonds,options and futures are bought and sold.It is also known as aftermarket.In other words,it is market where investors buy and sell securities they already own.