Which of the following pairs of feature and market is correctly matched?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Located at specified places – Secondary market
Option (1) Prices are determined by demand and supply for the security – Primary market — Incorrect. This feature belongs to the secondary market. In the primary market, prices are decided by the management of the company.
Option (2) Directly promotes capital formation – Secondary market — Incorrect. It is the primary market that directly promotes capital formation. The secondary market does so only indirectly.
Option (3) Located at specified places – Secondary market — Correct. Stock exchanges work from specified places. The primary market has no fixed geographical location.
Option (4) Ownership of existing securities is exchanged between investors – Primary market — Incorrect. This happens in the secondary market. In the primary market, the company sells securities to investors.
NCERT (Pre-rationalised Edition):
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