Question

Which type of secondary market provides the most efficient market for financial securities?

Answer 1

Secondary market:- After the primary market is the secondary capital market. This is more commonly known as the stock market or the stock exchange. Here the securities (shares, debentures, bonds, bills etc) are bought and sold by the investors.

The securities are traded in a highly regularised and legalized market within strict rules and regulations. This ensures that the investors can trade without the fear of being cheated. In the last decade or so due to the advancement of technology, the secondary capital market in India has seen a great boom.

so stocks market provides the most efficient market for financial securities.

The stock market or secondary market ensures free marketability, negotiability and price discharge. Secondary market has further two components:

• Spot Market : Where securities are traded for immediate delivery and payment.
• Futures Market : Where the securities are traded for future delivery and payment.

Types of secondary market:-

• india international exchanges
• BSE Ltd.
• Ace derivatives and commodity exchange limited
• National Stock Exchange of India Ltd.
• Hapur commodity exchange Ltd
• India pepper and spice trade association, Kochi
• Indian commodity exchange Ltd, New Delhi
• Magadh stock exchange Ltd
• Metropolitan stock exchange of India Ltd
• Multi Commodity Exchange of India Ltd (MCX)
• National Commodity and Derivatives Exchange etc.

functions of securities market:-

• Secondary markets are an economic barometer.
• Secondary market offers liquidity
• Stock markets attract foreign capital
• Secondary market regulates Companies etc.