Q. ‘Primary Market plays a very important role in the Securities Market”. Justify the statement.
Ans: 1. The primary market provides the channel for sale of new securities (1m)
2. Primary market provides opportunity to issuers of securities; Government as well as corporates, to raise resources to meet their requirements of investment and/or discharge some obligation. (1m)
3. They may issue the securities at face value, or at a discount/premium and these securities may take a variety of forms such as equity, debt etc. (1m)
4. They may issue the securities in domestic market and/or international market. (1m)