Finra Series-6 Exam - Topic 3 Question 5 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 5
Topic #: 3

Mary is interested in buying shares of the Lambchops Corporation, which sells over-the-counter. The market maker with the best bid price--$3.15--is Veggie Investments. The market maker with the best ask price--$3.27-is Carnivor Investments. Mary conducts trades in NYSE-listed stocks through her broker, Omnivor and Associates.

Given this scenario, which of the following statements is true?

AMary can buy shares of Lambchops Corporation at the bid price of $3.15 by contacting Veggie Investments directly.

BMary can buy shares of Lambchops Corporation at the ask price of $3.27 by contacting Carnivor Investments directly.

CMary can buy shares of Lambchops Corporation at the bid price of $3.15 by contacting Omnivor and Associates.

DMary can buy shares of Lambchops Corporation at the ask price of $3.27 by contacting Omnivor and Associates.

Show Suggested Answer

Suggested Answer: D

Mary can buy shares of Lambchops Corporation for $3.27 from the market maker with the best ask price, Carnivor, by contacting her broker, Omnivor and Associates, which will execute the transaction. The ask price is the price at which market makers in the over-the-counter market are willing to sell the stock, and over-the-counter transactions, like NYSE transactions, are executed by brokers.

by Dominque at May 05, 2022, 09:26 PM

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Leah

4 months ago

So she can't just call Veggie for the bid? That's surprising!

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Corazon

4 months ago

I agree, D is the way to go!

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Tiffiny

4 months ago

Wait, can she really contact Omnivor for that? Seems off.

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Inocencia

4 months ago

Definitely B! You can't buy at the bid price directly.

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Izetta

5 months ago

Mary has to pay the ask price to buy shares, not the bid.

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Leonida

5 months ago

I’m not sure, but I feel like the bid price is only for selling, so maybe she can only buy at the ask price through her broker? That would point to D again.

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Julio

5 months ago

I practiced a similar question where the broker was involved, and I think she has to go through Omnivor for the ask price, which makes D look right.

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Virgina

5 months ago

I'm a bit confused. I thought she could only buy at the bid price if she went through the market maker directly, but that doesn't seem to apply here.

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Lai

5 months ago

I think I remember that Mary can only buy at the ask price through her broker, so maybe option D is correct?

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Breana

5 months ago

Okay, I've got this. The default locale setting controls the language for the user interface and the default prompts and announcements. I'll select those two options.

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Jonelle

5 months ago

Okay, let me see. Fiscal policy is about the government's financial tools, so it's probably related to taxation or spending. I'm leaning towards C, but I want to double-check my understanding before answering.

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Nathalie

5 months ago

Hmm, I'm not sure about that. Wouldn't an edit check be better to catch any manual changes to the voucher details?

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