Brokers and dealers are key players in financial markets. Both are
involved in buying and selling financial products, but they have different
roles. Brokers connect buyers and sellers on behalf of clients, while
dealers trade for their accounts to earn profits.
In this activity, you'll review various characteristics and match them to
either a broker or a dealer to reinforce your understanding of how each
operates within the financial system.
Click or tap on a statement, then on the appropriate category to place it.
A wealth management firm helps clients build investment portfolios and
executes trades on their behalf but does not trade for its own account.
An investment bank buys newly issued corporate bonds and resells them to
investors, helping the company raise capital.
Goldman Sachs purchases government bonds and sells them at a higher
price, profiting from the resale.
A trading firm regularly buys and sells securities for its own
portfolio, making money from the bid-ask spread.
An online platform like Robinhood allows investors to buy and sell
stocks directly, charging little or no commission.
A financial institution provides market liquidity by continuously
quoting bid and ask prices for securities and earning profits from the
price difference.
A firm acts as an intermediary in financial markets, connecting buyers
and sellers but does not hold securities for itself.
A financial firm executes stock trades on behalf of individual investors
but does not buy or sell securities for its own account.
Broker
Dealer
A broker executes trades on behalf of clients but does not trade for its
own account.
Online platforms like Robinhood act as brokers by facilitating trades
for investors.
Wealth management firms help clients trade and manage investments but do
not trade for their own account.
Brokers act as intermediaries, connecting buyers and sellers without
holding securities themselves.
Underwriting newly issued bonds and reselling them to investors is a
dealer function.
A dealer buys and sells securities for its own portfolio and profits
from the bid-ask spread.
Dealers provide market liquidity by quoting bid and ask prices and
earning from the spread.
Buying and reselling securities for profit, as Goldman Sachs does with
government bonds, is a dealer function.