Detailed Answer
(a) The requirement is to identify the purpose of the
primary market. Answer (a) is correct because the primary market
is the market for new stocks and bonds. Answer (b) is incorrect
because existing securities are traded on a secondary market.
Answer (c) is incorrect because the futures market is where
commodities contracts are sold, not the capital market. Answer
(d) is incorrect because exchanges of existing securities do
not occur in the primary market.
