An Attempt by a Market Maker to Earn a Profit

question 52

Multiple Choice

An attempt by a market maker to earn a profit on the price movements of securities by taking inventory positions for its own account is called

• A)risk arbitrage.
• B)an agency transaction.
• C)best efforts underwriting.
• D)pure arbitrage.
• E)a principal transaction.

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Definitions:

Dependent Variable

The variable in an experiment that is expected to change as a response to changes in the independent variable.

Monetary Savings

The act of preserving money by reducing expenses or storing money for future use, often regarded as a key aspect of financial planning.

Sale Price

The final amount at which a product or property is sold after any discounts or negotiations.

Everyday Low Price

A pricing strategy where products are consistently offered at low prices without special promotions or discounts.