Which statement best describes the function of intermediaries in the trading process?

• A. They facilitate trades between buyers and sellers, ensuring market efficiency
• B. They set the daily market index
• C. They issue new securities for issuers
• D. They enforce trading halts during volatility

Answer: (A)

Intermediaries act as the bridge between buyers and sellers, providing liquidity and smoother price discovery. By connecting orders, matching supply and demand, and executing trades, brokers and market makers make it easier and faster for participants to trade, which reduces search costs and limits missed opportunities. This flow keeps markets efficient because prices reflect more readily available information and trades happen with less delay or friction.

Setting a daily market index is handled by index providers, not intermediaries. Issuing new securities is a primary market function carried out by issuers and their underwriters. Enforcing trading halts during volatility is the domain of exchanges and regulators.