Which of the following best describes the role of a broker-dealer?

The role of a broker-dealer is best described by the option that highlights the facilitation of trading between buyers and sellers. A broker-dealer acts as an intermediary in the financial markets, enabling transactions by connecting those who want to buy securities with those who wish to sell them. This function is crucial in maintaining market liquidity and ensuring that trades can occur efficiently.

Broker-dealers can operate in two distinct capacities: as brokers, who execute trades on behalf of clients and earn commissions, and as dealers, who buy and sell securities for their own account, potentially profiting from the difference between the buy and sell prices. Therefore, their primary role encompasses both buying and selling, as well as facilitating the trading process itself.

The other options focus on more specific aspects of what broker-dealers might do. While they can sell securities for their own account or underwrite new issues, these activities do not capture the full scope of a broker-dealer’s role in the market. Additionally, providing financial advice is typically associated with the advisory services offered by financial advisors rather than the core function of broker-dealers, which fundamentally revolves around executing trades and facilitating market transactions.