Question

A municipal bond trader may do any of the following EXCEPT

		enter offers on behalf of a broker-dealer
		rate a municipal bond’s creditworthiness
		request bids
		position a broker-dealer’s inventory

Answer 1

Ans ) Municipal bonds are the debt obligation of the government entities. As in the case the money is loaned inorder to receive a fixed interest for a predetermined period. A municipal bond broker is a broker who trades on behalf of the investor. And work as the middleman between bond buyer and bond seller.The work of the municipal bond trader is to trade over the counter of on exchange . The other function of the municipal bond broker is the market maker functions in which the broker assume the function of buying and selling out of their own inventory on the basis of posted bid and ask pric. In a more simple word they provide liquidity to the for buyers and sellers. The other function of municipal bond trader is related to position trading and hence anticipating a longterm upward or downword price change they take advantage of the trend by entering at the right time and sell out when there is a break in the trend hence municipal bond broker take a position on a broker dealer inventory. The rating of municipal bond creditworthiness is not a function of the municipal bond broker as it is done by the credit rating independent agency.