Question

The essential function of a _________ market is to facilitate the transfer of investible funds from savers to entrepreneurs or to expand existing ones through the issue of securities for the first time.

• A. secondary
• B. capital
• C. primary
• D. money

Answer 1

The correct option is C primary

• The primary market is also known as the new issues market. It deals with new securities being issued for the first time.
• The essential function of a primary market is to facilitate the transfer of investible funds from savers to entrepreneurs seeking to establish new enterprises or to expand existing ones through the issue of securities for the first time.
• The investors in this market are banks, financial institutions, insurance companies, mutual funds and individuals.