Multiple Choice QuestionWhich type of market serves companies that wish to raise financial capital?Multiple choice question.Over-the-counter (OTC) marketPrimary marketSecondary marketPublic market
Question
Multiple Choice QuestionWhich type of market serves companies that wish to raise financial capital?Multiple choice question.Over-the-counter (OTC) marketPrimary marketSecondary marketPublic market
Solution
The type of market that serves companies that wish to raise financial capital is the Primary market.
Here's why:
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Over-the-counter (OTC) market: This is a decentralized market where securities are traded directly between two parties, without a broker. It does not typically involve raising new capital.
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Primary market: This is the market where securities are created. It's in this market that companies sell (issue) new stocks and bonds to the public for the first time, such as with an initial public offering (IPO). This process helps companies to raise new financial capital.
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Secondary market: This is the market where investors buy and sell securities they already own. It does not involve the company that issued the securities, hence it does not help companies raise new capital.
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Public market: This is a general term for markets that trade securities publicly, it can include both primary and secondary markets. But the specific market that serves companies to raise financial capital is the primary market.
So, the answer is Primary market.
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