When a Securities Firm Acts as a Broker, It

question 45

Multiple Choice

When a securities firm acts as a broker, it

• A)guarantees the issuer a specific price for newly issued securities.
• B)makes a market in specific securities by adjusting its own inventory.
• C)executes transactions between two parties.
• D)purchases securities for its own account.

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Definitions:

Net Income

Net Income is the total profit of a company after all expenses and taxes have been deducted from total revenues, indicating the company's overall profitability.

Classified Balance Sheet

A balance sheet that groups together similar items under the headings of assets, liabilities, and equity to enhance the understanding of a company's financial position.

Current Assets

Resources anticipated to be transformed into cash, sold, or used up within a year or throughout the usual operational cycle of the company.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.