Question

The basic distinction between a primary and a secondary market is a. proceeds from sales in the primary market go to the current owner of a security; proceeds in secondary market go to the original owner. b. primary markets involve direct dealings within regional exchanges. c. only new securities are sold in the primary market; only outstanding securities are brought and sold in the secondary market.

Answer 1

Answer:

c. Only new securities are sold in the primary market.

Explanation:

• Primary markets is where securities are sold for the first time. Secondary market is a place (physical o virtual place) where securities are renegociated.

• As an example, think about a company which is increasing its capitalization and wants to emit new stocks: it would do it in the primary market.
• On the other hand, if some of the members of the company wantsto buy more stocks from that company, unless the company is emiting new stocks, he or she would have to buy the stocks in the secondary market.