Question

New issued shares are dealt in

• A. Secondary market
• B. Primary market
• C. Both Secondary and Primary markets
• D. None of these

Hint:

In the primary market, companies issue new securities to raise capital, while in the secondary market, these securities are traded between investors.

Answer 1

The Correct Option is B

Step 1: Understanding the concept.
Newly issued shares are offered for the first time through the Primary market. This market enables companies to raise capital by issuing new securities to the public or private investors.
Step 2: Analyzing the options.
- (A) Secondary market: Incorrect, as the secondary market deals with the buying and selling of shares that have already been issued.
- (B) Primary market: Correct, as new shares are issued in the primary market, which is where companies first sell their shares to the public.
- (C) Both Secondary and Primary markets: Incorrect, as new shares are specifically dealt with in the primary market, not both.
- (D) None of these: Incorrect, because option (B) is the correct one.
Step 3: Conclusion.
The correct answer is (B) Primary market, as new shares are dealt in the primary market.