Using Chapter 16 of your assigned text distinguish for your classmates the difference between a Primary and Secondary market?
Respond to these two answers with 100 words each wether you agree or not and why.
1. The process through which a market becomes a source of securities is known as the primary market. Securities are developed on the market for people to buy when they want to invest. The primary markets’ main purpose is to allow the firm to provide long-term financing. The secondary market is defined as the location where the company’s issued shares are exchanged among investors. Investors may simply purchase and sell shares without the firm interfering. In other words, the primary market is where securities are generated, while the secondary market is where investors exchange those securities.
2. A primary market is a place where securities are created and traded for the first time where as in secondary market the securities that have already been created are being traded, no new securities being traded for the first time are sold in the secondary market, this market is also known as the stock market for example if you want to buy shares of apple company you would be dealing in secondary market as the shares of this company already exist and you would be dealing with someone who already owns them, whereas if a company is offering share directly to raise some equity then it would be called a primary market.
