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Question
Distinguish between the following:
Primary market and Secondary market
Solution
| Points | Primary Market | Secondary Market | |
| 1. | Meaning | The issue of new shores by the company is done in the primary market. | The securities issued earlier are traded in the secondary market. |
| 2. | Mode of Investment | Direct investment in the securities. Securities are acquired directly from the company. | Indirect investment as the securities are acquired from other stakeholders. |
| 3. | parties in action | The parties dealing in this market are companies and investors. | The parties dealing in this market are only investors. |
| 4. | Intermediary | The underwriters are the intermediaries. | The security brokers are the intermediaries. |
| 5. | Value of Security | The price of security in the primary market is fixed as it is decided by the company. | The price of a security is fluctuating, depending on the demand and supply conditions in the market. |
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RELATED QUESTIONS
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