Distinguish between primary and secondary securities market.

CPA-Financial-Management-Section-3 Revision kit

Primary Market
– A market where securities are first issued e.g. a stock exchange.
– The money flows from the investor to the company issuing the securities to raise capital.

Secondary market
– A market where securities are subsequently traded after being issued in the primary market.
– Money flows from buyer of security to the seller of security.
– Secondary market improves the liquidity of securities and assist in their pricing or valuation.

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