Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment
4. Understanding how the primary and secondary markets work is key to understanding how stocks, bonds, and other securities trade. Compare and contrast primary and secondary capital markets. (250 words)
Difficulty level: Easy
Reference: Insights on India
Why the question:
The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2022 Secure timetable.
Key Demand of the question:
To write about the differences between primary and secondary capital markets.
Directive word:
Compare and contrast – provide for a detailed comparison of the two types, their features that are similar as well as different. One must provide for detailed assessment of the two.
Structure of the answer:
Introduction:
Start by mentioning the role of capital markets in the economy.
Body:
Compare and contrast primary and secondary capital markets on the various following parameters – Definition, types of purchasing, nature of buying and selling, role of intermediaries, price levels, organisation of markets, advantages and disadvantages.
Conclusion:
Conclude by summarising.
