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Question
State any four functions of 'Secondary - Market'.
Solution
The four functions of secondary market are enlisted below.
- One of the basic functions of secondary market is to provide liquidity and marketability to the already existing financial assets and securities. It provides a ready platform for the trading of existing securities.
- It enables a constant valuation of the securities and helps in building the demand and supply. In this way, it helps in determining the price of the securities.
- It ensures safety and fairness in transactions.
- It provides a platform for channelising the savings to the most productive use. In this way, it facilitates growth and development of the economy.
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