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What economic advantages are created by the existence of: (i) Primary markets. (ii) Secondary markets (iii) Portfolio management firms.

      

What economic advantages are created by the existence of:

(i) Primary markets.
(ii) Secondary markets
(iii) Portfolio management firms.

  

Answers


Martin
(a) (i)PRIMARY MARKET

Raising Capital Business
- mobilizing savings
- Government can raise capital (sell bonus)
- Open market operators (control excess liquidity)
- Vehicle for Foreign Direct Investment

(ii) SECONDARY MARKET

- Investment improvement for companies and small investors.
- Barometer for Healthy of economy and companies ( as whole)
- Privatization of parastatals and giving local citizens a chance for ownership of multi-national companies.
- Realize investments (by disposal in small quantities due to separation of ownership and control. - Improves corporate governance
- Diversification of investments hence reduction of risk
- Liquidity of securities improved.

(iii)
(i)Diversification
(ii) Professional advice
(iii) Watchdog for share under/over valuation
iv) Enhances market efficiency through information
marto answered the question on February 7, 2019 at 08:41


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