Future Business Leaders of America (FBLA) Securities and Investments Practice Test

What does the term "negotiated market" refer to?

1. A market where buyers and sellers negotiate prices

2. A market dominated by government securities

3. A market with fixed prices for all securities

4. A market limited to private equity investments

The correct answer is: A market where buyers and sellers negotiate prices

The term "negotiated market" refers to a type of market where buyers and sellers engage in discussions to agree on the prices of securities, rather than relying on a fixed price structure. This means that transactions can vary based on the negotiations between parties, allowing for a more flexible pricing mechanism. Such markets often facilitate unique transactions that reflect the specific conditions of the securities being traded, as the final price is determined through direct negotiation. In contrast, other choices describe different market characteristics. A market dominated by government securities is typically more structured and may have less flexibility in individual security pricing due to regulatory influences. A market with fixed prices for all securities indicates a more standardized approach that simplifies trading but restricts negotiation. Finally, a market limited to private equity investments suggests a focus on a specific type of investment rather than the broader concept of price negotiation among parties engaged in various securities. Each of these alternatives highlights distinct market dynamics that do not align with the concept of a negotiated market.