The over-the-counter market refers to
A)a section of the NYSE where stocks of small companies are traded.
B)an illegal operation where securities in non-existing companies are scammed.
C)a network of securities dealers who trade securities through an electronic communication system.
D)stock trading in different regions of the country.

Question

Quizplus · Accepted Answer

The over-the-counter market (OTC) is a decentralized market for securities and is not located on a physical exchange, unlike the NYSE. Instead, it is a network of securities dealers who trade securities through an electronic communication system. The OTC is a legitimate market for trading securities of smaller companies that do not meet the listing requirements of major stock exchanges. Option A is not correct because only small company stocks are not traded on NYSE, but OTC does not have a physical market. Option B refers to a fraudulent scheme, which is not related to the OTC market. Option D is incorrect as stock trading is not restricted to different regions of the country.

The Over-The-Counter Market Refers to