Which of the following statements is incorrect?
A)Market-makers take positions to capitalize on the discrepancy between the prevailing stock price and their own valuation of a stock.
B)Market-makers may take the opposite position of uninformed investors and therefore stand to benefit if their expectations are correct.
C)Market makers are required to purchase the stocks they are assigned for a price existing when the market opened on any given day.
D)The spread quoted for a given stock may vary among market-makers.

Question

Quizplus · Accepted Answer

Market makers are not required to purchase the stocks they are assigned for a price existing when the market opened on any given day. They are responsible for providing liquidity and making two-sided markets, meaning they must be willing to buy or sell a security at any given time, but they are not obligated to purchase stocks at specific prices.

Which of the Following Statements Is Incorrect