Which of the following statements is true about dealer markets?
A) NYSE is the best-known example of a dealer market.
B) A dealer market involves time-consuming search for a fair deal.
C) The advantage of a dealer over a brokered market is that brokers cannot guarantee that an order will be executed promptly, while dealers can, because they have an inventory of securities.
D) All of the above are true of dealer markets.

Question

Quizplus · Accepted Answer

Dealers have an inventory of securities, which allows them to guarantee prompt execution of an order, giving them an advantage over brokers. The NYSE is not an example of a dealer market, but rather a hybrid auction market. Option B is incorrect; dealer markets typically involve quick execution of trades, without the need for time-consuming searches for a fair price.

Which of the Following Statements Is True About Dealer Markets