Securities Trader Representative (Series 57) Practice Exam

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Which of the following best describes CQS securities transactions?

Transactions in Nasdaq-listed stocks after normal market hours
Transactions in Nasdaq-listed stocks on exchanges under unlisted trading privileges
Exchange-listed stock, other than Nasdaq, traded in the over-the-counter market
Other exchange-listed stock transactions on the OTC Bulletin Board

The correct answer is: Exchange-listed stock, other than Nasdaq, traded in the over-the-counter market

The correct answer accurately describes CQS securities transactions as related to exchange-listed stocks that are not part of the Nasdaq trading system but are traded over-the-counter (OTC). CQS, or Consolidated Quotation System, provides real-time quotes for securities listed on different exchanges, specifically focusing on securities other than those listed on Nasdaq. CQS serves as a mechanism for improving the transparency of prices for various exchange-listed securities trading in the OTC market, allowing traders and market participants to access wider market information. This includes stocks from exchanges such as the New York Stock Exchange (NYSE) and others that may not be captured directly in the Nasdaq system. Thus, this option reflects the correct categorization of the activity pertaining to CQS securities. The other options, while relevant to specific trading environments, do not align with the definition of CQS transactions. For instance, options that mention Nasdaq-listed stocks or transactions specifically occurring after hours do not accurately embody what falls under the CQS transaction umbrella, which distinctly covers exchange-listed stocks engaged in OTC trading.