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Answer: Dealers provide liquidity services, enabling clients to buy or sell securities with low transaction costs when they wish to trade.
**Explanation:** - **Option A (Brokers):** Brokers facilitate the execution of client orders but do not provide liquidity services, as they do not trade with clients directly. - **Option B (Dealers):** Dealers play a crucial role in providing liquidity by allowing clients to trade securities at any time with minimal transaction costs. This service is essential for maintaining market efficiency. - **Option C (Exchanges):** Exchanges are venues for trading but do not directly provide liquidity services; instead, they facilitate interactions between traders and dealers. Thus, the correct answer is **B**, as dealers are the intermediaries most likely to provide liquidity services.
Author: LeetQuiz Editorial Team
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Which of the following financial intermediaries is most likely to provide liquidity services to its clients?
A
Brokers act as agents who execute orders for their clients but do not engage in trading with them.
B
Dealers provide liquidity services, enabling clients to buy or sell securities with low transaction costs when they wish to trade.
C
Exchanges serve as platforms where traders and dealers can meet to arrange their trades.
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