SIE practice questionmediumMunicipal Securities - MSRB Rules
A municipal securities dealer agrees to a private arrangement with another dealer to manipulate bond prices. Under MSRB rules, this is:
- AProhibited, since price manipulation is barred✓ Correct answer
- BEncouraged for liquidity
- CAllowed under certain conditions
- DA required market making activity
Explanation
Why A — Prohibited, since price manipulation is barred
MSRB rules prohibit manipulation of municipal bond prices under any circumstances. Market making and liquidity do not justify such arrangements.
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