Finra Exam Series-6 Topic 10 Question 98 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 98
Topic #: 10

The primary difference between dealers and brokers is that:

Adealers operate exclusively in the primary market whereas brokers operate only in the secondary market.

Bdealers operate only in the bond market, while brokers conduct trades in stocks, bonds and options.

Cdealers are market makers, who buy and sell out of their own inventory of securities, while brokers are matchmakers, who match buyers with sellers.

DBoth Choices B and C describe differences between dealers and brokers.

Show Suggested Answer

Suggested Answer: A

Of the selections, only 12b-1 fees and management fees are included in the expense ratio of the fund. Brokerage costs that the fund incurs when it buys and sells securities are not included (which is why a fund's turnover ratio is important to consider.) Redemption fees are paid by the shareholder to the fund, so it would not be included in a fund's expense ratio since it is not an expense of the fund.

by Danica at Mar 08, 2025, 11:28 AM

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Sheron

13 days ago

Well, if you're a dealer, you're basically the one-stop-shop for all your clients' trading needs. Brokers, on the other hand, are like the matchmakers of the financial world - they just bring the parties together and let them do the dance.

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Francesco

14 days ago

C is the way to go. Dealers are the ones who take the risk and provide the liquidity, while brokers are just the middlemen.

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Barrie

1 months ago

Hmm, I was leaning towards B, but C makes more sense. Dealers are the ones who hold the inventory and make the market.

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Leslee

21 days ago

I think C is the correct answer. Dealers are market makers who hold inventory, while brokers match buyers and sellers.

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2 months ago

I think the answer is C. Dealers are market makers and brokers are matchmakers.

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