Question : Assertion: Secondary market trading occurs on stock exchanges.
Reason: Secondary market transactions involve buying and selling newly issued 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. Secondary market trading does indeed occur on stock exchanges, where investors buy and sell existing (previously issued) securities such as stocks, bonds, and derivatives.
The reason is false. Secondary market transactions involve the trading of existing securities, not newly issued ones. Newly issued securities are transacted in the primary market, not the secondary market.
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