Question

Which of the following is/are true for the secondary market?
(A) Facilitates liquidity and marketability of securities
(B) Provides valuation of securities
(C) Enables price discovery
(D) Creates a wealth effect
Choose the correct answer from the options given below :

• A. (A), (B), and (D) only.
• B. (A), (B), and (C) only.
• C. (A), (B), (C), and (D).
• D. (B), (C), and (D) only.

Hint:

Secondary markets play a critical role in ensuring liquidity and aiding economic growth by reflecting market dynamics.

Answer 1

The Correct Option is C

The secondary market performs multiple functions like enabling liquidity, price discovery, and valuation of securities. It also indirectly impacts wealth creation by allowing investors to trade and realize the value of their investments.