Brokers and dealers help make securities market liquid. What role does each play in making markets...

Brokers and dealers help make securities market liquid. What role does each play in making markets more liquid?

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Expert Solution

The broker acts as intermediaries to the buyer and sellers which brings both the parties (seller and buyer of securities) together. For their service, they also charge brokerage fees. By bringing together both parties, the chances of buying and selling the securities increase in the market which further leads to increase liquidity in the market.

Dealers are the individuals or firms which trade securities on their account, unlike brokers who trade on behalf of their clients. Dealers bid on securities and buying and selling of the securities are done from their account as part of their regular business which provides liquidity to the security market as securities can be traded according to demand and supply in the market.

Rahul Sunny answered 1 year ago

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