The secondary market is also known as the ____________.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Stock exchange
Option (1) Stock exchange — Correct. The secondary market is also called the stock market or stock exchange. Existing securities are bought and sold there.
Option (2) Money market — Incorrect. The money market is a market for short-term funds with a maturity of up to one year.
Option (3) Capital market — Incorrect. The capital market is the wider market for long-term funds. It is divided into the primary market and the secondary market.
Option (4) Debt market — Incorrect. A debt market is where debt instruments such as bonds and debentures are traded.
NCERT (Pre-rationalised Edition): “SECONDARY MARKET The secondary market is also known as the stock market or stock exchange. It is a market for the purchase and sale of existing securities. It helps existing investors to disinvest and fresh investors to enter the market. It also provides liquidity and marketability to existing securities. It also contributes to economic growth by channelising funds towards the most productive investments through the process of disinvestment and reinvestment. Securities are traded, cleared and settled within the regulatory framework prescribed by SEBI. Advances in information technology have made trading through stock exchanges accessible from anywhere in the country through trading terminals. Along with the growth of the primary market in the country, the secondary market has also grown significantly during the last ten years.” |