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 a firm that is licensed to buy and sell securities (e.g., stocks, bonds) on behalf of investors, thus facilitating the trading of securities in the secondary market.
Statement 2 is false. Stockbrokers primarily operate in the secondary market, facilitating the buying and selling of existing securities. They are not responsible for issuing new securities; that role is typically associated with underwriters and primary dealers.
