13.Which function of the capital market involves the creation of a secondary market for existing securities? A. Mobilization of savings B. Price determination C. Facilitating company growth D. Risk mitigation
Question
13.Which function of the capital market involves the creation of a secondary market for existing securities? A. Mobilization of savings B. Price determination C. Facilitating company growth D. Risk mitigation
Solution
The function of the capital market that involves the creation of a secondary market for existing securities is A. Mobilization of savings. In the secondary market, investors buy and sell securities that were previously issued. The proceeds of these sales go to the investors, not the issuing company, thus mobilizing savings by allowing investors to free up capital.
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