Which market is characterized by the creation of new securities?

The primary market is characterized by the creation of new securities. This market is where businesses and governments issue new stocks and bonds to raise capital for various purposes, such as expanding operations or funding projects. In the primary market, the securities are sold directly to investors, often through mechanisms like initial public offerings (IPOs) for stocks or bond issues.

Investors in the primary market are purchasing securities directly from the issuer, meaning they are involved at the point where securities are initially created and offered for sale. This distinguishes the primary market from others like the secondary market, where existing securities are bought and sold among investors without the involvement of the issuing company.