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

29 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

30 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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Leonardo

5 days ago

So, dealers are like market makers while brokers are like matchmakers.

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Kizzy

8 days ago

That's true, brokers just connect buyers and sellers without taking on any risk.

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Adelle

10 days ago

I agree, dealers are the ones who take on the risk by holding inventory.

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Barrie

2 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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Mozell

4 days ago

So, it seems like the primary difference is that dealers hold inventory and make the market, while brokers just facilitate trades.

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Madonna

5 days ago

I agree, dealers are the ones who buy and sell from their own inventory, while brokers just connect buyers and sellers.

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Leslee

1 months 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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Kasandra

2 months ago

I think D is the correct answer. Both the differences in B and C are valid between dealers and brokers.

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Chu

1 months ago

Yes, D is the most comprehensive choice that describes the distinctions between dealers and brokers.

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Shala

2 months ago

I agree, D seems to cover all the differences between dealers and brokers.

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Deonna

2 months ago

Hmm, that makes sense too. I see where you're coming from.

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Adelaide

2 months ago

Definitely C, dealers are the ones who buy and sell from their own inventory, while brokers just match buyers and sellers.

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Cathrine

17 days ago

Yes, that's correct. Dealers take on more risk by holding inventory, while brokers do not.

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Stefan

27 days ago

So, the primary difference is that dealers trade from their own inventory, while brokers do not.

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Shaun

29 days ago

Brokers just connect buyers and sellers without holding inventory.

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Gussie

1 months ago

I agree, dealers are market makers who trade from their own inventory.

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Josefa

2 months ago

I disagree, I believe the answer is D. Both B and C describe the differences.

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Deonna

3 months ago

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

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