All the investment vehicles that you can use in your investment plan are traded in the securities markets in the form of stocks, bonds, and other financial instruments. There are physical places such as the NYSE (New York Stock Exchange) or the electronic networks such as NASDAQ (National Association of Securities Dealers Automated Quotations) where investors trade these securities. Securities markets can be divided into primary and secondary markets. When securities are bought and sold by investors who did not originally purchase the issued security, the transactions take place in the market. Within the arena of security trading, the secondary market plays an extremely important role. The secondary market can be divided into the broker market and dealer market. For each of the following statements, indicate by checking the appropriate boxes, whether each statement is true of broker markets, dealer markets, both markets, or neither market. Broker Dealer Trades take place on a physical trading floor. Ask and bid prices are posted electronically. The NYSE and NYSE/MKT are a part of this market. This market involves trades in securities for big-name companies.

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

ChapterST3: The Stock Market: Its Function, Performance, And Potential As An Investment Opportunity

Section: Chapter Questions

Problem 5CQ

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Question

All the investment vehicles that you can use in your investment plan are traded in the securities markets in the form of stocks, bonds, and other financial instruments. There are physical places such as the NYSE (New York Stock Exchange) or the electronic networks such as NASDAQ (National Association of Securities Dealers Automated Quotations) where investors trade these securities.

Securities markets can be divided into primary and secondary markets. When securities are bought and sold by investors who did not originally purchase the issued security, the transactions take place in the market.

Within the arena of security trading, the secondary market plays an extremely important role. The secondary market can be divided into the broker market and dealer market.

For each of the following statements, indicate by checking the appropriate boxes, whether each statement is true of broker markets, dealer markets, both markets, or neither market.

	Broker	Dealer
Trades take place on a physical trading floor.
Ask and bid prices are posted electronically.
The NYSE and NYSE/MKT are a part of this market.
This market involves trades in securities for big-name companies.