Series 10 Exam Question 59: Answer and Explanation

Question: 59

As a municipal bond trader, you call a market maker asking for a quote on a specific municipal bond. The trader responds, "I have them 6.1 bid offered 5.9 out firm." What does this mean?

• A. That is a firm quote and you may trade at those prices with the market maker immediately.
• B. The dealer is obligated to another party at those prices.
• C. The quote is for informational purposes only.
• D. The trader would have to "go out" to another dealer to get the bonds at those prices.

Correct Answer: C

Explanation:

A syndicate member filling a customer's order will receive the total takedown.