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 traded among investors. It involves buying and selling shares, bonds, and other financial instruments that have already been issued.
Statement 2 is false. The issuance of new securities to the public occurs in the primary market, not the secondary market. The secondary market is where these already issued securities are traded.
