Question : Which of the following statement is correct? Statement 1:Primary Market promotes capital formation directly. Statement 2: Only buying of securities takes place in the Primary Market.
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: Both are true
Solution : Primary market is concerned with the new issues there for primary market is also known as new issue market. Through the medium of this market both the newly established companies as well as existing companies collect capital. In this market the flows of funds is from savers to borrowers.
Hence, option A is correct.
Question : Which of the following statement is correct? Statement 1: Capital market refers to that market where transaction in long term securities are made. Statement 2: Money market refers to that market where transaction in short term securities are made.
Question : Which of the following statement is correct? Statement 1: Secondary markets issue securities for the first time. Statement 2: Primary market has no specified place.
Question : Which of the following statement is correct? Statement 1: The capital market helps in capital formation. Statement 2: It is the nature of the capital market to satisfy the short term financial needs of the Government and the industrial sector.
Question : Which of the following statement is correct? Statement 1: The increase in the investments in the country is called capital formation. Statement 2: The chief function of the capital market is to provide a platform for the sale and purchase of securities.
Question : Which of the following statement is correct? Statement 1: In the capital market transactions are made in the short term securities Statement 2: It is the nature of the capital market to established balance between the supply and the demand side.
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