Enables diversification and the use of hedging tools. 4. Summary of Key Differences Primary Market Secondary Market Asset State New securities only Existing, "pre-owned" assets Capital Flow From investor to the issuer Between investors Price Setting Fixed by management/underwriters Fluctuates via supply and demand Access Primarily institutional Open to retail and institutional 5. Regulatory Oversight
Includes stocks (equity) , bonds (fixed income), and derivatives. Capital Market Finance: An Introduction to Prim...
Capital formation and the efficient allocation of resources. 2. The Primary Market: The Launchpad Enables diversification and the use of hedging tools
Prices fluctuate constantly based on supply and demand. Regulatory Oversight Includes stocks (equity) , bonds (fixed
The original issuer is not involved in these transactions and does not receive additional funds.
Establishes the fair market value of assets through continuous trading.
Prices are typically set by the issuer and underwriters before the offering. Major Methods: