How Does a Bond Dealer Generate Profits When Trading Bonds

question 29

Multiple Choice

How does a bond dealer generate profits when trading bonds?

• A) By maintaining bid prices lower than ask prices
• B) By maintaining bid prices higher than ask prices
• C) By retaining the bond's next coupon payment
• D) By lowering the bond's coupon rate

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Definitions:

Irrational

Acting without or against reason; not based on logical, rational thinking.

Immoral/Unethical Acts

Behaviors or actions that are considered wrong or unacceptable based on societal norms or ethical standards.

Non-Deontology

A term incorrectly formed and likely refers to ethical theories not based on duty or rules, such as consequentialism or virtue ethics; however, the correct term does not exist in standard ethical discussions, so I'll mark it as NO.

Intrinsic Worth

It refers to the inherent value that something has in itself, irrespective of its utility to others.