Primary Market vs Secondary Market MCQs January 8, 2026September 11, 2025 by u930973931_answers Score: 0 Attempted: 0/50 Subscribe 1. Which of the following deals with new issue of securities? (A) Secondary market (B) Primary market (C) Money market (D) Forex market 2. Which market provides liquidity for existing securities? (A) Primary market (B) Secondary market (C) Capital market (D) Money market 3. Initial Public Offering (IPO) is issued in: (A) Primary market (B) Secondary market (C) Money market (D) Commodity market 4. Trading of already issued securities takes place in: (A) Primary market (B) Secondary market (C) Primary & Secondary both (D) Money market 5. In which market does the company receive funds directly from investors? (A) Primary market (B) Secondary market (C) Forex market (D) Commodity market 6. In which market do investors trade among themselves? (A) Primary market (B) Secondary market (C) Treasury market (D) Private market 7. Which of the following is a key function of the primary market? (A) Facilitating new capital formation (B) Providing liquidity to old securities (C) Speculation (D) Tax collection 8. The main function of the secondary market is: (A) Raising funds for companies (B) Providing liquidity to investors (C) Issuing IPOs (D) Collecting dividends 9. Rights issues are offered in: (A) Primary market (B) Secondary market (C) Both markets (D) Money market 10. Buying and selling of securities among investors occurs in: (A) Primary market (B) Secondary market (C) Money market (D) Treasury market 11. Which of the following provides a direct link between company and investor? (A) Primary market (B) Secondary market (C) Forex market (D) Commodity market 12. Which market reflects the continuous price movement of securities? (A) Primary market (B) Secondary market (C) IPO market (D) Treasury market 13. Underwriting is mainly associated with: (A) Primary market (B) Secondary market (C) Money market (D) Capital market 14. Stock exchange is an example of: (A) Primary market (B) Secondary market (C) Primary & Secondary both (D) Commodity market 15. Which market helps in mobilizing savings into investments? (A) Primary market (B) Secondary market (C) Forex market (D) Money market 16. Which market plays an important role in price discovery of securities? (A) Primary market (B) Secondary market (C) IPO market (D) Treasury market 17. Private placements of securities are made in: (A) Primary market (B) Secondary market (C) Capital market (D) Money market 18. Which market allows companies to expand their ownership base? (A) Primary market (B) Secondary market (C) Money market (D) Forex market 19. Which market allows easy entry and exit for investors? (A) Primary market (B) Secondary market (C) Both (D) Money market 20. Which of the following is NOT a feature of the primary market? (A) Issue of new securities (B) Funds flow to company directly (C) Provides liquidity to investors (D) Involves underwriters 21. Securities are first listed on stock exchange after being issued in: (A) Primary market (B) Secondary market (C) Treasury market (D) Commodity market 22. Which market deals with “second-hand” securities? (A) Primary market (B) Secondary market (C) IPO market (D) Capital market 23. The primary market is also called: (A) New issue market (B) Second-hand market (C) Trading market (D) Money market 24. The secondary market is also known as: (A) IPO market (B) Resale market (C) New issue market (D) Treasury market 25. The role of brokers is more significant in: (A) Primary market (B) Secondary market (C) Both markets (D) Commodity market 26. Companies raise capital for expansion in: (A) Primary market (B) Secondary market (C) Forex market (D) Money market 27. Investors earn profits mainly through price fluctuations in: (A) Primary market (B) Secondary market (C) Money market (D) Treasury market 28. Book building process is a feature of: (A) Primary market (B) Secondary market (C) Money market (D) Forex market 29. Which market is vital for economic growth by raising fresh capital? (A) Primary market (B) Secondary market (C) Both markets (D) Treasury market 30. Which market improves marketability of securities? (A) Primary market (B) Secondary market (C) Commodity market (D) Treasury market 31. Which of the following does NOT occur in the secondary market? (A) Price discovery (B) Resale of securities (C) New issue of securities (D) Speculation 32. Initial buyers of IPO can sell their securities in: (A) Primary market (B) Secondary market (C) Both (D) Money market 33. Which market requires approval from regulators before issuing securities? (A) Primary market (B) Secondary market (C) Commodity market (D) Forex market 34. Liquidity in securities is ensured by: (A) Primary market (B) Secondary market (C) Treasury market (D) Money market 35. Which market is more influenced by company performance directly? (A) Primary market (B) Secondary market (C) Forex market (D) Money market 36. Which market is more influenced by investor demand and supply? (A) Primary market (B) Secondary market (C) Treasury market (D) Money market 37. Bonus issues are provided through: (A) Primary market (B) Secondary market (C) Both (D) Commodity market 38. The main risk for investors arises in: (A) Primary market (B) Secondary market (C) Forex market (D) Money market 39. Which market ensures continuous valuation of securities? (A) Primary market (B) Secondary market (C) IPO market (D) Treasury market 40. Which market acts as a link between savers and entrepreneurs? (A) Primary market (B) Secondary market (C) Money market (D) Commodity market 41. Which market provides a platform for speculation and arbitrage? (A) Primary market (B) Secondary market (C) IPO market (D) Treasury market 42. Public issue of shares is made through: (A) Primary market (B) Secondary market (C) Forex market (D) Treasury market 43. Which market requires prospectus to be issued? (A) Primary market (B) Secondary market (C) Both (D) Money market 44. Which market increases investor confidence by providing exit routes? (A) Primary market (B) Secondary market (C) Money market (D) Forex market 45. Which market helps companies to determine cost of capital? (A) Primary market (B) Secondary market (C) Treasury market (D) Commodity market 46. Which market increases depth and breadth of capital market? (A) Primary market (B) Secondary market (C) Both markets (D) Money market 47. Which market contributes directly to company’s fund raising? (A) Primary market (B) Secondary market (C) Commodity market (D) Forex market 48. Which market provides continuous trading opportunities? (A) Primary market (B) Secondary market (C) Money market (D) Treasury market 49. Which market involves higher regulatory disclosure by companies? (A) Primary market (B) Secondary market (C) Both markets (D) Commodity market 50. The main difference between primary and secondary market is: (A) New vs existing securities (B) Cash vs credit transactions (C) Domestic vs foreign securities (D) Bonds vs shares