Question : Which of the following statement is correct?
Statement 1: Money market refers to that market in which existing securities are bought and sold.
Statement 2: The primary market's activity occurs when securities are held for the first time.
Option 1: Both are true
Option 2: Both are false
Option 3: Statement 1 is true and statement 2 is false.
Option 4: Statement 1 is false and statement 2 is true.
Correct Answer: Statement 1 is false and statement 2 is true.
Solution : Secondary market refers to that market in which existing securities are bought and sold. Money market refers to that market where transaction in short term securities are made. When is security sold for the first time it is the activity of the primary market. However when the same securities sold in the open market it is the activity of the secondary market.
Hence, option D is correct.