What is the major economic role of the underlying markets – Primary Markets?

Practice question from NISM Series IV - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

A

Delta Hedging
B

Trading
C

Risk Management
Financing

Correct answer

Why this is the answer

The primary market enables entities (like governments and corporations) to raise funds directly from investors. It plays a fundamental role in financing the economy.

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NISM Series IV - Mock Test 3