The following statements regarding the specialist are true:
A)Specialists maintain a book listing outstanding unexecuted limit orders.
B)Specialists earn income from commissions and spreads in stock prices.
C)Specialists stand ready to trade at quoted bid and ask prices.
D)Specialists cannot trade in their own accounts.
E)A,B,and C are all true.

Question

Quizplus · Accepted Answer

All three statements (A, B, and C) are true regarding specialists. A specialist is responsible for maintaining a book of outstanding unexecuted limit orders, earns income from commissions and the difference between the bid and ask prices, and stands ready to trade at quoted bid and ask prices. Additionally, specialists are not allowed to trade in their own accounts to avoid any conflicts of interest.

The Following Statements Regarding the Specialist Are True