CFA CFA Level 1 Question of the Week: Level 1 – Equity Investments

Question of the Week: Level 1 – Equity Investments

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      A dealer is called a primary dealer when:

      • A. they act as a dealer and a broker.
      • B. they stand ready to buy and sell a particular security.
      • C. they trade with central banks when they conduct monetary policy.
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      The correct answer is Option C. 

      Primary dealers are dealers with whom central banks trade when conducting monetary policy.

      Option A refers to broker-dealers and Option B refers to market-makers.

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