ng 2018: Intermediate Accounting . This course Hide blocks Ax\' Standard view t2

Question

ng 2018: Intermediate Accounting . This course Hide blocks Ax' Standard view t2 Which of the following applies to secondary markets? Select one: A. Many investors might be unwilling to provide resources to corporations if there is no available mechanism for the future sale of their stooks and bonds to others B. transactions are important to the efficient allocation of resources in our economy C. Transactions help to establish market prices for additional shares that may be esued in the future D. All of the abovs 803 PM

Explanation / Answer

Select - D All the above

Existence of secondary market provides liquidity, so when ever desired investors can convert their investments back to dollars. In the absence of such facility, many investors does not invest in primary market.

Demand and supply conditions in the secondary market, shifts emphasis to more efficient units in the economy.

And also determines the price for securities, such that subsequent issues can be price to match the market conditions.

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