Which of the following statement about Primary Market is incorrect?

Question

Question

This question was previously asked in

UPSSSC Junior Assistant Official Paper (Held On: 19 Jan, 2025)

Securities are sold by the company to the investor directly (or through an intermediary).
Only buying of securities takes place in the primary market, securities cannot be sold there.
Prices are determined and decided by the management of the company.
There is a fixed geographical location
None of the above

Answer 1

The correct answer is There is a fixed geographical location.

Key Points

The primary market is where securities are created and offered for the first time.
It involves the issuance of new securities directly from the company to investors, either directly or through an intermediary.
The primary market is primarily concerned with the sale of new securities and does not involve the resale of securities.
Prices of the securities in the primary market are determined by the management of the company issuing them.
Unlike the secondary market, the primary market does not have a fixed geographical location. Transactions can occur over various platforms and locations.

Additional Information

Securities are sold by the company to the investor directly (or through an intermediary).
- In the primary market, companies raise capital by selling new securities directly to investors, often through intermediaries like investment banks.
- This process allows companies to obtain funds needed for expansion, operations, or other business activities.
Only buying of securities takes place in the primary market, securities cannot be sold there.
- The primary market is where investors can purchase new securities directly from the issuer. Once these securities are bought, they can be traded in the secondary market.
Prices are determined and decided by the management of the company.
- The company issuing the securities determines the price based on factors like market conditions, demand, and the company’s financial health.