Primary markets allow which of the following activities?

Primary markets are specifically designed for the issuance of new securities. In these markets, organizations, such as corporations or governments, can raise capital by issuing new stocks or bonds to investors. This process involves the first sale of these securities to raise funds, which could be used for various purposes, including expansion, paying off debt, or funding research and development.

When organizations seek to raise capital through the primary market, they often work with underwriters who help determine the price of the securities and facilitate the sale to investors. Unlike other market divisions, where existing securities are bought and sold, the primary market focuses exclusively on new offerings and the initial transaction of securities. This distinguishes it from secondary markets, where investors exchange existing securities. Therefore, the ability of organizations to issue new securities for capital is the defining feature of primary markets.