4-45 in Market-Making

question 81

Multiple Choice

4-45 In market-making

• A)agency transactions are two-way transactions on behalf of customers,such as a dealer working for a fee or commission.
• B)agency 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:

Favorably to Decisions

Refers to making choices that are considered positive or beneficial in their outcomes.

Plurality Rule

A decision-making process where the option that receives the most votes or support, but not necessarily a majority, wins.

Hidden Profile

A hidden profile refers to a situation in group decision-making where the best decision is supported by information that is not initially shared among all group members.

Pool Unshared Information

The process of bringing unique knowledge and perspectives from individual group members together to enhance group decision-making and problem-solving.