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3 years ago

What is the difference between the primary market and the secondary market?

Business

1 answer:

NeX [460]3 years ago

4 0

Answer:

The SECONDARY MARKET is the sale of "used" stock in that the current owner sells it to a new owner and the proceeds go to the current owner, not the company, while the PRIMARY MARKET  is the market where the initial sale of common stock is made by a company and the proceeds of the sale go to the company for the newly issued stock.

Explanation:

The primary market is the market where new shares or bonds are sold to investors.Primary market are mainly for setting up new business or for expansion. On the other hand, secondary market is the market where existing securities are traded among investors.

The primary and secondary market are both under the capital market which is the market for buying and selling of long term debts or equity backed securities.

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The monthly payments will be $353.12

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When a purchase is made at present value and the payment will be financed at a rate of interest i for n periods, the present value PV is

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where R is the regular payment (usually monthly).

Solving for R

$\displaystyle R=PV\cdot \frac{i}{1-(1+i)^{-n}}$

It's important to recall than only the unpaid amount goes financing, if some down-payment is made, it must be subtracted from the PV to be financed.

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Computing R

$\displaystyle R=16,387.5\cdot \frac{0.00567}{1-(1+0.00567)^{-54}}$

$\boxed{R=\$353.12}$

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3 years ago

What is the difference between the primary market and the secondary​ market?

What is the difference between the primary market and the secondary market?