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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24 days ago

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

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