Question

Explain the difference between primary and secondary markets and why secondary markets are so important to businesses that need to raise capital? Give examples from the real world?

Answer 1

Difference between primary and secondary market are

1. In the primary ,market securities are traded for the first time while secondary market securities are re traded after first trading. and are re-traded
2. In the primary ,market the investors directly buy from company and government while in secondary market investors purchase from brokers .
3. Investments banker purchase or underwrite securities and government bonds which is the primary market whereas securities are traded in secondary market in various stock exchanges.

Examples in Real world. The IPO issued bu companies are the primary market and when  these securities are traded in the stock exchange it is called secondary market

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