Which ONE of the following statements is true about dealer markets?
A) Dealers do not place capital at risk.
B) A dealer market involves time-consuming search for a fair deal.
C) Dealers guarantee the sale or purchase of an order.
D) The NYSE is the best known example of a dealer market.

Question

Quizplus · Accepted Answer

Dealers in a dealer market guarantee the sale or purchase of an order, which means they take on risk to ensure that the transaction is completed. Option A is false because dealers do place capital at risk. Option B is false because a dealer market involves a relatively quick transaction between a buyer and a dealer. Option D is false because the NYSE is an example of an auction market, not a dealer market.

Which ONE of the Following Statements Is True About Dealer