Question : Assertion: Stock markets facilitate the buying and selling of shares.
Reason: Companies issue shares to raise funds from the primary market.
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:
Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Solution : The correct answer is (a) Both assertion and reason are true, and the reason is the correct explanation of the assertion.
The assertion states that stock markets facilitate the buying and selling of shares, which is true. Stock markets are platforms where shares of publicly traded companies are bought and sold by investors.
The reason states that companies issue shares to raise funds from the primary market, which is also true. Companies issue shares through initial public offerings (IPOs) in the primary market to raise capital, which investors can then buy and sell in the secondary market, facilitated by stock markets.
