What is the primary market that facilitates the purchase and sale of bonds?

The primary market that facilitates the purchase and sale of bonds is the debt market. This market specifically deals with debt instruments, which include various forms of bonds, loans, and debentures. In the debt market, issuers such as governments, municipalities, and corporations sell bonds to investors to raise capital.

The primary market refers to the initial issuance of securities, where investors can buy bonds directly from issuers. Once the bonds are issued, they can subsequently be traded in the secondary market, but the initial sale occurs in the debt market. The importance of the debt market lies in its ability to provide funding for various entities while offering investors a relatively stable investment option compared to stocks.

This understanding is crucial for grasping the structure and function of financial markets, which include not just the debt market, but also equity and other markets, each serving distinct purposes for different types of financial instruments.