Question

Explain, providing examples the difference between:

a) primary and secondary markets;

b) money market and capital markets;

c) equities and fixed income securities;

d) technical and fundamental analysts in financial markets

Answer 1

Primary market is a market where fresh issue of securities are offered to public like IPO, FPO, right issue while secondary market is a market where issued securities are traded like stock exchange

Money market is a type of financial market where securities for short term duration are issued from 1 day to maximum one year example are call money market while capital market where securities are issued more than a year or for long term period example are issuance of bonds, shares etc.

Equities refers to the securities in the nature of ownership like common stock, preferred stock etc. while fixed income securities in which company owes to the bondholders and a fixed financial charges are committed.

Technical analysis uses price volume and value of trade of securities for the projection of future performance with the help of graphs and patterns while fundamental analyst uses fundamental information of Economy, industry and of company to project he future performance of the stock