The over-the-counter markets:
A)are also known as quote-driven markets
B)have dealers who provide transactional immediacy
C)have dealers who act as market markers
D)have dealers who act as principals because they trade on their own behalf and hold a position.
E)All of these.

Question

Quizplus · Accepted Answer

All of these are true statements about the over-the-counter (OTC) markets. OTC markets are not centralized because they involve the trading of assets that are not listed on formal exchanges. Therefore, dealers in the OTC markets act as intermediaries between buyers and sellers, providing transactional immediacy and market-making services. Since they deal on their own behalf, they also act as principals in OTC transactions. These markets are also known as quote-driven markets because prices are quoted by dealers rather than through an automated exchange.

The Over-The-Counter Markets