What Is the Difference Between a Broker and a Dealer

question 11

Multiple Choice

What is the difference between a broker and a dealer?

• A)There is no difference.
• B)The broker takes a position in a transaction while a dealer for a fee merely arranges trades between buyers and sellers.
• C)The broker sells stocks and bonds, whereas the dealer only deals in bonds.
• D)The dealer sometimes takes a position (becomes a principal) in a transaction, in addition to arranging trades; the broker only arranges trades for a fee.

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Definitions:

Deadweight Loss

Deadweight loss is a loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved.

MP-3 Player

A portable digital device designed to play audio files in the MP3 format, allowing for the storage and playback of music and other audio.

Tax

A compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions.

Deadweight Loss

An economic inefficiency arising when a good or service fails to meet its free market equilibrium point.