Final answer:
The securities markets provide liquidity to investors, allowing them to convert investments into cash or trade them easily. Primary markets offer less liquidity compared to secondary markets where securities can be resold to other investors.
Step-by-step explanation:
In the broadest terms, the securities markets act as providers of liquidity to investors. Liquidity refers to how easily investors can convert their securities into cash or trade them without a significant loss in value. Primary markets and secondary markets offer different levels of liquidity. In the primary market, only the original issuer can redeem the asset, which is less liquid. However, in the secondary market, securities can be sold to other investors, offering high liquidity and the ability to quickly sell the investment at market value. Banks and other financial intermediaries also play a crucial role in providing liquidity by turning deposits into loans and other investments.