Question : Which market provides funds for long-term capital requirements of a company?
Option 1: Money market
Option 2: Primary market
Option 3: Secondary market
Option 4: Commodity market
Correct Answer: Primary market
Solution : The correct answer is (b) Primary market.
The primary market is the market where new securities, such as stocks or bonds, are issued for the first time by companies or governments to raise funds. It is also referred to as the "new issue market" or the "primary offering market."
In the primary market, companies sell their securities directly to investors, thereby raising capital for long-term capital requirements. This is typically done through processes such as Initial Public Offerings (IPOs) or bond issuances. The funds raised in the primary market go directly to the issuing company or government entity.
Question : Which market is primarily used for raising short-term funds to meet working capital requirements?
Option 2: Capital market
Option 3: Forex market
Option 4: Real estate market
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