What best describes a broker-dealer?

• A. A person or firm in the business of buying and selling securities
• B. A person who issues securities
• C. A bank that holds customer deposits
• D. An individual investor trading for themselves

Answer: (A)

In the securities markets, a broker-dealer is a firm or person that buys and sells securities for others (as a broker) and/or for its own account (as a dealer). This dual role means they can execute client orders and also trade securities from their own inventory to provide liquidity. An issuer is someone who creates and sells new securities, a bank that holds deposits is a banking institution rather than a market intermediary, and an individual investor trades for their own account without acting as an intermediary for others.