Question

How does the existence of a secondary market benefit investors in terms of liquidity and marketability?

a.

Investors can only get back their investment after the redemption period

b.

Investors can convert securities into cash at their convenience

c.

Investors are forced to hold securities until the company gets dissolved

d.

Investors can only make profits through primary market investments

Answer: (b).Investors can convert securities into cash at their convenience Explanation:The secondary market allows investors to convert securities into cash whenever they want, providing liquidity and marketability.

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Q. How does the existence of a secondary market benefit investors in terms of liquidity and marketability?

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