Secondary Market:

The secondary market allows for the purchase and sale of existing securities like shares and debentures. Here's an explanation of why the correct answer is option 'C':

Definition:
The secondary market is where investors buy and sell securities they already own. It provides a platform for trading of existing securities among investors.

Key Features:
1. Liquidity: It offers liquidity to investors by providing a ready market for buying and selling securities.
2. Price Determination: Prices of securities are determined by market forces of demand and supply in the secondary market.
3. Regulation: The secondary market is regulated by stock exchanges and regulatory authorities to ensure fair and transparent trading practices.
4. Accessibility: It allows investors to trade securities easily through brokerage firms and online trading platforms.

Types of Transactions:
1. Equity Trading: Involves buying and selling of shares in publicly listed companies.
2. Debt Trading: Involves buying and selling of debentures, bonds, and other fixed-income securities.
3. Derivatives Trading: Involves trading of financial instruments like futures and options based on underlying securities.

Importance:
1. Price Discovery: Secondary market transactions help in determining the fair market value of securities.
2. Capital Formation: It provides an avenue for companies to raise capital by issuing shares to the public.
3. Risk Management: Investors can hedge their risks by trading in the secondary market.

In conclusion, the secondary market plays a crucial role in the financial system by facilitating the trading of existing securities and ensuring liquidity for investors.