In Market-Making

question 6

Multiple Choice

In market-making

• A)principal transactions are two-way transactions on behalf of customers, such as a dealer working for a fee or commission.
• B)principal transactions are when market makers take long or short positions and seek profits on price movements.
• C)market makers take inventory positions to stabilize the market in the securities.
• D)Answers A and C only.
• E)Answers B and C only.

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Definitions:

Retail Price

The cost at which an item is sold to the general public by retailers.

Mark-up on Cost

The percent increase applied to the goods' cost price to cover overhead expenses and profit.

London Drugs

A Canadian retail store chain specializing in pharmaceuticals, electronics, cosmetics, and a range of household goods.

Operating Expenses

Ongoing costs for running a business, excluding the cost of goods sold but including items like rent and salaries.