Principal Transactions Allow the Market Maker to Always Make a Profit

question 88

True/False

Principal transactions allow the market maker to always make a profit regardless of whether the market price for a specific stock is rising or falling.

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Definitions:

Par Common Stock

The nominal or face value of a common stock as stated in the corporate charter, unrelated to its market value.

Property Tax

A local government levy on real estate that is determined by the value of the property.

Federal Income Taxes

Taxes levied by the U.S. federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.

State Income Taxes

State income taxes refer to taxes imposed by individual states on the income earned by residents and businesses within their jurisdiction.