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PRMIA Exam 8006 Topic 6 Question 71 Discussion

Actual exam question for PRMIA's Exam I: Finance Theory, Financial Instruments, Financial Markets ? 2015 Edition exam
Question #: 71
Topic #: 6
[All Exam I: Finance Theory, Financial Instruments, Financial Markets ? 2015 Edition Questions]

Which of the following markets are characterized by the presence of a market maker always making two-way prices?

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Suggested Answer: A

Over the counter and electronic communication networks match buyers and sellers. However, there is no market making function, ie, in periods of stress liquidity may completely disappear from these markets. Exchanges normally have market makers that are required to present two way quotes on the securities they are making the market for. Therefore Choice 'a' is the correct answer.


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