Question : Statement 1: Secondary market involves the trading of existing securities.
Statement 2: Secondary market involves the issuance of new securities to the public.
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. The secondary market involves the trading of existing securities, where investors buy and sell previously issued securities (e.g., stocks, bonds) from one another.
Statement 2 is false. The secondary market does not involve the issuance of new securities to the public. It's primarily about trading existing securities. The issuance of new securities to the public occurs in the primary market.
