SIE - Securities Industry Essentials Exam

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A broker-dealer just sold some stock out of its own inventory to a customer. The firm

Just violated FINRA rules and will be disciplined for the sale.
Just acted as an agent in the transaction; and will make a commission.
Just participated in an OTC trade; and it occurred in the fifth market.
Just acted as a principal in the transaction; and may earn a markup.


They firm acted as a dealer; as the principal in this transaction. This is not a violation of any rules. The dealer may earn a markup on the transaction; if the dealer previously purchased this security at a lower price.