Exercises · Q5
Q.Distinguish between the primary market and the secondary market.
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Start your 14-day free trial to unlock the full solution →| Basis | Primary Market | Secondary Market |
|---|---|---|
| What is traded | New securities, issued for the first time | Already-issued securities |
| Who receives the funds | The issuing company/government | The selling investor, not the original issuer |
| Common mechanism | IPO, rights issue, private placement | Trading on a recognised stock exchange |
| Effect on company's capital | Directly increases the company's funds | No direct effect on the company's funds |
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