Question : Assertion: Primary market transactions involve the issuance of new securities to the public.
Reason: Primary market transactions facilitate the trading of existing securities.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Assertion is true, but the reason is false.
Solution : The correct answer is (c) Assertion is true, but the reason is false.
The assertion is true. Primary market transactions involve the issuance of new securities to the public. Companies issue new stocks or bonds to raise capital from investors in the primary market.
The reason is false. Primary market transactions are focused on the issuance of new securities and are not related to the trading of existing securities. Trading of existing securities occurs in the secondary market, not the primary market.
Question : Assertion: The primary market deals with the trading of existing securities.
Reason: The primary market is involved in the issuance of new securities to the public.
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