SIE Exam Question 416: Answer and Explanation

Question: 416

A market maker is quoting a stock at 23.15 – 23.30. If the firm fails to honor its quote for at least one round lot on both sides of the market,

• A. It will be guilty of a manipulative and deceptive act.
• B. It will be guilty of a backing away violation.
• C. It will be involuntarily removed as a market maker in that stock for a period of one month.
• D. This is not a violation.

Correct Answer: B

Explanation:

B: Failure to honor a firm quote is called 'backing away.'