SIE practice questionmediumTrade Execution
A broker-dealer receives a customer market order to buy 50 shares of a thinly traded stock. What must the broker-dealer consider to ensure best execution?
- AExecution speed, price, and the overall liquidity of the market✓ Correct answer
- BOnly the lowest price available
- COnly the speed of execution
- DOnly whether the stock is exchange-listed
Explanation
Why A — Execution speed, price, and the overall liquidity of the market
Best execution requires a broker-dealer to consider multiple factors, including price, execution speed, and market liquidity. Focusing solely on price or speed does not meet the best execution standard.
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