Question

All the investment vehicless that you can use in vour investment plan are traded in the securities markets in the form of stocks, bonds and other financial instruments. There are physical places such as the NYSE (New York Stock Exchange) or the electronic networks such as NASDAQ (National Association of Securities Dealers Automated Quotations). Securities markets can be divided into primary and secondary markets. When previously issued securities are sold and bought by investors in the market, the transactions take place in the markets. Within the arena of security trading, the secondary market plays an extremely important role. The secondary market can be divided into broker markets and dealer markets. For each of the following statements, indicate by checking the appropriate boxes whether it is true of broker markets, dealer markets, both, or neither.
Market orders are posted electronically and are filled immediately at the best available price.

The party buying the security directly transacts with the party selling the security

Trades take place on a physical trading floor.

This market facilitates the sale of new stock from corporations to private investors.

Answer 1

Answer: 1. Dealer

2. Broker

3. Broker

4. Neither

Explanation:

Securities are generated or born in the Primary market and it allows for the direct trading between the company and the investors. Secondary Markets, on the other hand, allows the buying and selling of these securities between investors.

Secondary Markets are further divided into two and they are;

1. Dealer Markets which are facilitated through electronic networks. Competition among dealers determine the price of stocks.

2. Auction/Broker Markets which allow for physical trading at an agreed location. The presence of all dealers would help in price-fixing.

3. Sale of new stock from corporations to private investors is a form of Primary Market where stock is bought directly from where it was created.

Therefore,

1. Market orders are posted electronically and are filled immediately at the best available price: Dealer

2. The party buying the security directly transacts with the party selling the security: Broker

3. Trades take place on a physical trading floor: Broker

4. This market facilitates the sale of new stock from corporations to private investors: Neither.

Answer 2

Answer:

Please see below

Explanation:

a. Market orders are posted electronically and are filled immediately at the best available price. -----Dealer Market

b. The party buying the security directly transacts with the party selling the security. -------Broker Market

c. Trades take place on a physical trading floor. --------Broker Market

d. This market facilitates the sale of new stock from corporations to private investors. ------Dealer Market