How Does a Bond Dealer Generate Profits When Trading Bonds

question 36

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 upon resale

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Definitions:

Ketone Bodies

Water-soluble molecules produced by the liver from fatty acids during periods of low food intake, carbohydrate restrictive diets, fasting, or prolonged intense exercise.

Carbohydrate Diet

A diet that emphasizes foods high in carbohydrates, such as grains, fruits, and vegetables.

Low-Fat

Refers to foods or diets that contain a reduced amount of fat, especially saturated fat, compared to their standard versions.

Oxidative Deamination

A biochemical process in which an amine group is removed from an amino acid or other compound, usually resulting in the formation of an imine and the liberation of ammonia, often coupled with the reduction of NAD+ to NADH.