What distinguishes an Investment Dealer?

What distinguishes an Investment Dealer?

• A. They can only distribute mutual funds
• B. They trade securities as a principal or agent and can act as an underwriter
• C. They deal with scholarship plan investments
• D. They only interact with exempt markets

Answer: (B)

An Investment Dealer is distinguished by their ability to trade securities both as a principal and as an agent while also having the capability to act as an underwriter. This means that they can buy and sell securities on their own behalf (as a principal) as well as facilitate transactions on behalf of clients (as an agent). In addition, their role includes underwriting, which involves being involved in the process of issuing new securities to the market.

The other options do not accurately capture the full scope of what an Investment Dealer does. For instance, the limitation to distributing only mutual funds does not reflect the broader range of securities they are involved with, which includes stocks, bonds, and other financial instruments. Dealing specifically with scholarship plan investments represents a niche area that does not encompass the wider functions of an Investment Dealer. Similarly, an Investment Dealer's interaction with exempt markets is only a segment of their activities, not reflecting the comprehensive nature of their role in trading securities in various markets.