How is a liquid secondary market of value to the issuer of shares in the primary market?
a. If shares are sold at a profit in the secondary market, the issuer of the shares receives the difference between the buying price and the selling price.
b. Investors are more likely to buy shares in the secondary market if they can easily sell their shares in a liquid primary market.
c. The secondary market estabilishes the fair value of shares through the forces of supply and demand.
d. Both B and C.
May I ask which one is the correct answer and where can I find more information about this question to understand more about a liquid secondary market or liquid primary market please. In addition, we selected D and it is incorrect, so I think the correct answer is A for this question.
Option C :- The secondary market... View the full answer
- Option A which you think is correct is NOT TRUE - Reason being - When shares are sold at a profit, the seller receives the profit not the issuer - After the shares are issued in primary market, the Issuer has not role in the trading in secondary market
- May 04, 2018 at 6:24am