Question

A primary market is a financial market in which brokers provide trading services for commission. a broker trades from his/her own account to meet customer demands. new issues of a security are sold to initial buyers by a corporation or a government agency. previously issued securities are traded. One of the factors that contribute to possible higher rates of returns from private equity and hedge funds is high initial amount of investments they invest in securities guaranteed by governments lack of liquidity they invest only in blue chip stocks

Answer 1

A primary market is where new issues of securities are sold to initial buyers, while a secondary market is where previously issued securities are traded.

Step-by-step explanation:

A primary market is a segment of the financial markets where new issues of a security, such as stocks and bonds, are sold to initial buyers directly by the corporation or government agency. In contrast, a secondary market is where previously issued securities are traded between investors. The initial public offering (IPO) is an example of a transaction in the primary market where a company sells its stock for the first time to the public, helping to provide a return to early-stage investors and raising financial capital for business expansion. Private equity and hedge funds may offer higher potential returns partly due to their lack of liquidity, as investors cannot easily redeem their investments, which could lead to higher risk-adjusted returns compared to more liquid investments.