Which market is a large computer network through which investment dealers negotiate transactions; most bonds trade there, and some stocks as well?

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Multiple Choice

Which market is a large computer network through which investment dealers negotiate transactions; most bonds trade there, and some stocks as well?

The market described is the over-the-counter market. It operates as a decentralized network where investment dealers negotiate trades directly with one another, often using electronic systems to quote prices and match orders. Most bonds are traded OTC because many are not listed on formal exchanges, so they move through dealer networks rather than a centralized venue. Some stocks also trade OTC, especially smaller or unlisted issues. This contrasts with the primary market, which handles new issues, and the exchange, which is a centralized venue for listed securities. In this setup, the dealer-to-dealer, networked trading is the hallmark of the OTC market.

The market described is the over-the-counter market. It operates as a decentralized network where investment dealers negotiate trades directly with one another, often using electronic systems to quote prices and match orders. Most bonds are traded OTC because many are not listed on formal exchanges, so they move through dealer networks rather than a centralized venue. Some stocks also trade OTC, especially smaller or unlisted issues. This contrasts with the primary market, which handles new issues, and the exchange, which is a centralized venue for listed securities. In this setup, the dealer-to-dealer, networked trading is the hallmark of the OTC market.

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