Practice Quiz

FINRA Series 6

Category - Series 6

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The primary difference between dealers and brokers is that:
  1. dealers operate exclusively in the primary market whereas brokers operate only in the secondary market.
  2. dealers operate only in the bond market, while brokers conduct trades in stocks, bonds and options.
  3. dealers are market makers, who buy and sell out of their own inventory of securities, while brokers are matchmakers, who match buyers with sellers.
  4. Both Choices B and C describe differences between dealers and brokers.
Explanation
Answer: C - The primary difference between dealers and brokers is that dealers are market makers, who buy and sell out of their own inventory of securities, while brokers are matchmakers, who match buyers with sellers. Both dealers and brokers engage in primary and secondary market transactions, and both conduct trades in stocks, bonds, and options.
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