Capital MarketsQuestion 352 of 398
A firm that maintains an inventory of a security and stands ready to buy and sell it for its own account is acting as a:
a.Broker (agent)
b.Dealer (principal)
c.Transfer agent
d.Clearing member
Explanation
A dealer, also called a principal, trades for its own account, maintaining an inventory and profiting from the markup or markdown on transactions. A broker, by contrast, acts as an agent, arranging trades between buyers and sellers for a commission.
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