Question : Statement 1: A stockbroker facilitates the trading of securities.
Statement 2: A stockbroker is only responsible for issuing new securities in the primary market.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, and statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer: Statement 1 is true, but statement 2 is false.
Solution : The correct answer is (b) Statement 1 is true, but statement 2 is false.
Statement 1 is true. A stockbroker is an individual or firm that is licensed to buy and sell securities (such as stocks, bonds, mutual funds) on stock exchanges. They facilitate the trading of securities between buyers and sellers in the secondary market.
Statement 2 is false. Stockbrokers are involved in both the primary and secondary markets. In the primary market, they can assist in the initial public offering (IPO) of new securities by helping companies issue shares to the public. However, their primary role is in the secondary market, where they facilitate the trading of existing securities among investors.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile