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Which of the following statements is true about secondary markets?
A. A buyer may incur search costs and find a seller on their own through a direct search.
B. A broker may bring buyers and sellers together, charging a commission.
C. A dealer may sell and buy securities using his inventory, therefore reducing search costs. The dealer's return is the bid-ask spread.
D. An auction market allocates the selling shares to the highest bidder.

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anthougo

Answer:

True statement about secondary markets is:

B. A broker may bring buyers and sellers together, charging a commission.

Explanation:

In a typical secondary market, investors buy and sell outstanding shares among themselves.  Acting as an intermediary between the stock exchange and the investor, a broker arranges the buying and selling of shares among investors, charging a commission for their work.  They facilitate the sale and purchase of shares in the secondary market.

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