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 is where existing securities (previously issued and purchased) are bought and sold among investors. It provides a platform for investors to trade these securities.
Statement 2 is false. The secondary market is not where new securities are issued. New securities are typically issued in the primary market, such as through Initial Public Offerings (IPOs) or subsequent offerings.
