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Even though the secondary markets do not contribute to the productive capacity of the economy, they...

Even though the secondary markets do not contribute to the productive capacity of the economy, they do so indirectly by providing liquidity to the individuals who buy these securities. True or False?

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Answer #1

Secondary market is the share market of the economy. Like New York stock exchangne.

So the share after the IPO are freely traded in the market and in this market individuals can buy and sells there shares.

Buying and selling the shares in the secondary market is very easy. Easily we can convert our investment in cash like in normaly in 3 working days we get the our invested money in our bank so this provide the the liquidity to the individuals.

Answer = True.

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