Question

What statement about primary and secondary markets is true? A. Primary markets include assets that can only be redeemed by the original holder. B. Secondary markets include assets that can only be redeemed by the original holder. C. You must first go through the primary market before investing in the secondary market. D. Primary markets include assets that can be resold.

Answer 1

Answer: Primary markets include assets that can only be redeemed by the original holder.

Step-by-step explanation:

Primary markets are financial markets where new securities are issued by companies. In this type of market, individuals transact business directly without any mediator. It is also known as new issue market.

Secondary markets are financial markets where securities that have been issued before are sold and purchased. In this type of market, investors transact business with one another that is they buy and sell securities from one another. Thus, secondary markets offer liquidity to all investors and the cost of transaction is very low.

Answer 2

Primary markets include assets that can only be redeemed by the original holder.