Question

In the space provided, note whether each instrument is in the primary or secondary market. Financial Instrument Treasury bonds issued for the first time New commercial paper issued by a corporation A 6-month Treasury bill being sold by its second owner First-time stock issued by a corporation Previously-issued stock traded on the New York Stock Exchange Primary/Secondary?

Answer 1

Primary market- 1.treasury bonds issued for the first time. 2.New commercial paper issued by corporation.   3. First time stock issued by a corporation. Secondary market - 1. 6 month treasury bill being sold by its second owner.    2. Previously issued stock traded on the New York stock exchange.

Primary market is a market where the Investors  directly purchase financial instruments or securities from corporations. Secondary market is a market where investors trade securities among themselves without the involvement of corporations.

As a result, all the instruments issued for the first time by the corporations comes under primary and those traded for the second time or issued previously comes under secondary. Another point which helps to distinguish is that the instruments traded in the stock exchange comes under secondary because stock exchange is a secondary market (e. g. New York stock exchange).