Multiple choice

The primary dealers deal mainly with which of the following?

  1. Shares and debentures

  2. Govt. securities

  3. Mutual fund units

  4. All of the above

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Primary dealer is a firm that buys government securities directly from a government, with the intention of reselling them to others. Thus, it acts as a market maker of government securities. The government may regulate the behaviour and number of its primary dealers and impose conditions of entry.