Economics Financial Markets Questions
The primary market refers to the market where new securities are issued and sold for the first time by companies or governments to raise capital. In this market, the securities are directly purchased from the issuer, and the proceeds from the sale go to the issuer.
On the other hand, the secondary market is where previously issued securities are bought and sold among investors. In this market, investors trade securities with each other, and the proceeds from the sale go to the selling investor rather than the issuer. The secondary market provides liquidity to investors by allowing them to buy and sell securities after the initial issuance in the primary market.