Discuss Finra Series-6 Exam Topic 4 Question 116

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.

Suggested Answer: C

The primary difference between dealers and brokers is that dealers are market makers, who buy and sell out of their own inventory of securities, while brokers are matchmakers, who match buyers with sellers. Both dealers and brokers engage in primary and secondary market transactions, and both conduct trades in stocks, bonds, and options.

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27 comments · newest first

Abel 9 hours ago

I think C is the best choice. It makes sense.

Mitzie 6 days ago

I feel C captures the essence of their functions perfectly.

Amie 11 days ago

C is straightforward. Dealers have their own inventory.

Rikki 16 days ago

True, but B is not accurate. Dealers aren't limited to bonds.

Britt 21 days ago

But what about D? It covers both B and C.

Caitlin 26 days ago

Agreed! Brokers just connect buyers and sellers.

Maurine 1 month ago

I think C is the best choice. It clearly explains the roles.

Chun 1 month ago

I lean towards D. It covers more ground.

Lavonna 1 month ago

C is clear and straightforward. Makes sense to me.

Adelle 2 months ago

I feel like A is misleading. Both markets are involved.

Ilene 2 months ago

But isn't D also correct? B has some truth too.

Lucy 2 months ago

Agreed! Brokers just connect buyers and sellers.

Vincent 2 months ago

I think C is the best choice. It really captures the roles.

Odelia 2 months ago

Brokers just connect buyers and sellers, right? That's how I see it!

Rusty 2 months ago

Wait, are dealers really only in the bond market? That seems off.

Dannette 3 months ago

D makes the most sense to me. Both B and C are true!

Virgilio 3 months ago

I thought brokers could also hold inventory sometimes?

Stefania 3 months ago

C is spot on! Dealers are definitely market makers.

Dianne 3 months ago

Choice D makes the most sense to me, both B and C are true!

Antione 3 months ago

I thought brokers could also be market makers sometimes?

Antione 3 months ago

Wait, are dealers really only in the bond market? That seems off.

An 4 months ago

Totally agree, C is spot on!

Jerlene 4 months ago

Dealers are market makers, brokers just match buyers and sellers.

Elina 4 months ago

I recall studying that dealers are more involved in making markets, so C sounds familiar. But I can't fully rule out D either since it mentions both B and C.

Royce 4 months ago

I thought brokers only worked in the secondary market, but I'm confused about the primary market part in A. That doesn't seem right to me.

Ruthann 4 months ago

I'm not entirely sure, but I feel like both B and C could be correct. I remember a practice question that mentioned market makers, which makes me lean towards D.

Sharita 6 months ago

I think I remember that dealers actually hold inventory, while brokers just connect buyers and sellers. So, maybe C is the right answer?

Finra Series-6 Exam - Topic 4 Question 116 Discussion