Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Markets

Question:

Answer the Question based on following case study.

Mr. Raj is working as finance Manager is Amaira Company. Company has a capital Base of ₹50 lacs of Equity shares of ₹100 each. Now Company wants to enter into a new project for which it requires capital of ₹40 lacs. There are two options available to him.First to invite subscription from public through issue of prospectus and second to go for long term borrowing by issuing debentures. But Issue of debentures will not be suitable as the rate of return of company is less than Interest Rate of debentures. So the final decision was to issue Equity shares.

What is the other name of Stock Exchange ?

Options:

Primary Market

Secondary Market

Retail Market

Wholesale Market

Correct Answer:

Secondary Market

Explanation:

The correct answer is option (2) : Secondary Market

The other name for Stock Exchange is "2. Secondary Market." Stock exchanges are a part of the secondary market, where existing securities (stocks, bonds, etc.) are bought and sold among investors, as opposed to the primary market, which is where securities are initially issued to the public for the first time.