The term 'Primary Market' in the capital market is the market for:
A. Only agricultural commodities
B. Only short-term money market instruments
C. Issue of new securities by companies and governments
D. Trading of existing securities
Answer: Option C
Solution (By JKSSB Mock Tests)
The primary market is where new securities are issued and sold for the first time to raise fresh capital. The secondary market deals with subsequent trading of existing securities.
Explanation:
Duesenberry’s relative-income hypothesis posits that consumption depends on the individual’s rank in the income distribution and on the highest income previously attained (ratchet effect).
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