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Question
Distinguish between Primarymarket and Secondary Market.
Solution
| Sr | Points | PRIMARY MARKET | SECONDARY MARKET |
| 1 | Meaning | The market is utilized for raising fresh capital in the form of shares and debentures. | It is a market where existing securities are resold or traded. |
| 2 | Function | The function is to raise long term funds through fresh issue of securities. | The function is to provide continuous and ready market for existing long term securities. |
| 3 | Participants | The participants are financial institutions, mutual fund, under writer, individual investor. | The participants of primary market as well as the stock brokers and the members of the stock exchange are the participants. |
| 4 | Listing Requirements | Listing is not required in the case of primary market. | Only listed securities can be dealt in the secondary market. |
| 5 | Determinants of Prices | The prices are determined by the management of the corporate houses with due compliances with the SEBI requirements for new issue of securities. |
in case of secondary market the prices are determined by forces of demand and supply in the market and they keep on fluctuating. |
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