What typically occurs in primary financial markets?

Primary financial markets are the venues where financial products, such as stocks and bonds, are issued for the very first time. In this context, issuing means that companies or governments create new securities to raise capital, which can then be used for various purposes like investment in growth, operational expenses, or handling debts.

When a company goes public through an Initial Public Offering (IPO), for instance, it is directly participating in the primary market by offering its shares to investors for the first time. This process is crucial as it allows entities to acquire the funds needed for expansion or improvements while giving investors the opportunity to purchase shares that did not exist before on the market.

The other options refer to different aspects of financial markets. Existing products being traded pertains to secondary markets, where securities are exchanged between investors after their initial issuance. Debt consolidation involves restructuring existing debts and isn't specifically related to financial market transactions. Interest rates can be influenced by various factors in different markets but aren't determined specifically in the primary market context. Thus, the option that aligns with the role of primary financial markets is indeed the one that states financial products are first issued.