In Regards to the Primary Dealer, Which of the Below

question 6

Multiple Choice

In regards to the primary dealer, which of the below statements is TRUE?

• A) Any firm can deal in government securities, but in implementing its open market operations, the Federal Reserve will deal directly only with dealers that it designates as unrecognized dealers.
• B) The Federal Reserve will make a reporting dealer into a primary dealer if it is convinced that the firm will continue to meet the established criteria.
• C) The Federal Reserve wants to be sure that firms requesting status as primary dealers have adequate capital relative to positions assumed in Treasury securities and disregard the amount of volume in Treasury securities.
• D) A reporting dealer is a firm that is taken off the Federal Reserve's regular reporting list.