Unit 8 Checkpoint

Which of the following is not part of the secondary markets? A) Mutual fund market B) The exchanges C) Over-the-counter market D) Third market

A) Mutual fund market

Secondary markets exist to do all of these except A) decrease liquidity in the national markets. B) allow investors to easily liquidate securities. C) support the existence of primary markets. D) allow individual investors easy access to investment vehicles.

A) decrease liquidity in the national markets.

Which of these broker-dealers would most likely have correspondent firms? A) An introducing broker-dealer B) A self-clearing firm C) A fully disclosed broker-dealer D) A market maker

B) A self-clearing firm

A central, physical, marketplace where securities are traded through a designated market maker is A) the third market. B) an exchange. C) the OTC. D) the pit.

B) an exchange.

A broker-dealer that concentrated its business efforts on proprietary trading would most likely be functioning as A) an investment adviser. B) an underwriter. C) a market maker. D) an investment banker.

C) a market maker.

A business entity that performs the function of receiving and delivering payments and securities on behalf of both parties to a securities transaction is called a A) transfer agent. B) broker-dealer. C) depository. D) clearing agency.

D) clearing agency.

An institutional customer, such as a hedge fund, utilizes the services of a broker-dealer who provides custody of securities, as well as other back-office functions, while allowing the customer to establish relationships with other broker-dealers for the purpose of executing orders. This account would be known as a A) clearing account. B) fully-disclosed account. C) self-clearing account. D) prime account.

D) prime account.

Both the individual and institutional investor are able to easily buy and sell securities to meet their objectives through A) primary markets. B) outdoor malls. C) biennial markets. D) secondary markets.

D) secondary markets.

Electronic market centers designed primarily for institutional investors describes A) the OTC market. B) the exchanges. C) the third market. D) the fourth market.

D) the fourth market.

Great Plains Securities, an OTC market maker, holds inventory and provides liquidity for Modulux Homes, an NYSE listed company. This is an example of A) the force market. B) the primary market. C) the fourth market. D) the third market.

D) the third market.