Practice Quiz

FINRA Series 6

Category - Series 6

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Which of the following statements about the over-the-counter market is true?
  1. Only penny stocks are traded in the over-the-counter market.
  2. Trades in the over-the-counter market are conducted via the auction process.
  3. Only bonds and other debt instruments are traded in the over-the-counter market.
  4. Stocks that are listed on exchange floors are also traded in the over-the-counter market.
Explanation
Answer: D -Stocks that are listed on exchange floors are also traded in the over-the-counter market. The term “third market” refers to over-the-counter trading of listed stocks. All types of securities-stocks, bonds, options, warrants, rights-trade over the counter. The over-the-counter market is a negotiated market, not an auction market.
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