What do market makers primarily provide to the securities market?

What do market makers primarily provide to the securities market?

• A. Research and advice to individual investors
• B. Liquidity
• C. Fund management services
• D. Investment analysis

Answer: (B)

Market makers primarily provide liquidity to the securities market. They facilitate the buying and selling of securities by being ready to purchase or sell stocks at publicly quoted prices, which helps ensure that there is sufficient volume in the market. This liquidity allows traders and investors to enter or exit positions more easily, as market makers are obligated to maintain a continuous presence in the market with their buy and sell orders. By doing so, they mitigate the risks of volatility and enable smoother transactions, ultimately enhancing market efficiency.

Market makers primarily provide liquidity to the securities market. They facilitate the buying and selling of securities by being ready to purchase or sell stocks at publicly quoted prices, which helps ensure that there is sufficient volume in the market. This liquidity allows traders and investors to enter or exit positions more easily, as market makers are obligated to maintain a continuous presence in the market with their buy and sell orders. By doing so, they mitigate the risks of volatility and enable smoother transactions, ultimately enhancing market efficiency.