Practice Exam 1

the trading system that allows a brokerage firm to bypass the exchanges and act as an agent bringing buyers and sellers together.

ATS

What is a primary function of a financial intermediary?

Assist in the transfer of capital from savers to users.

On what type of market do most bonds and debentures in Canada trade?

Dealer Markets

1. What best describes a trait of a stock that trades on the over-the-counter (OTC) market.

It is considered a speculative security

4. Who is responsible for providing liquidity on over-the-counter markets (OTC) by posting bid and ask quotations?

Market Makers

Life insurance companies have historically been active in which particular markets?

Mortgages, long term bonds

What type of financial intermediary owns securities as part of its inventory?

Principal