Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Markets

Question:

Based on the following case study, answer the question.

Big Limited is requiring ₹1000 crores for modernisation of its existing projects. A meeting of its finance department head was called with the board of directors to decide how to manage the required funds. It was decided in the meeting that ₹200 crores will be raised immediately by giving privilege to the existing shareholders to subscribe to a new issue of shares according to the terms and conditions of the company. ₹300 crores will be raised by allotting securities to institutional investors. Half of the balance required funds will be raised by a direct appeal to investors by means of a advertisement in newspapers and rest to issuing houses and stock brokers at an agreed price.

Identify the other name of Primary Marketg.

Options:

SEBI

Stock Exchange

Secondary Market

New Issue Market

Correct Answer:

New Issue Market

Explanation:

The correct answer is option (4) : New Issue Market

The other name for the Primary Market is :

4. New Issue Market

The "Primary Market" is often referred to as the "New Issue Market. " Here's an explanation of these terms :

1. Primary Market: The primary market is where new securities, such as stocks, bonds, or other financial instruments, are initially issued and sold to investors directly by the issuing company or entity. In the primary market, these securities are created and sold for the first time

2. New Issue Market: The term "New Issue Market" is another way to describe the primary market. In the New Issue Market, new securities are offered to investors for the first time. It emphasizes the fact that these securities are new, i.e., they have not been previously issued or traded. This market is where initial public offerings (IPOs), rights issues, and other forms of new securities offerings take place.

So, both "Primary Market" and "New Issue Market" refer to the same concept where new securities are introduced and sold to investors for the first time.