Which two primary activities are typically carried out by members of a stock exchange such as the NYSE?

• A. Buying and selling securities on behalf of clients
• B. Issuing new shares and managing company payroll
• C. Auditing financial statements and preparing tax returns
• D. Setting accounting standards and regulating interest rates

Answer: (A)

Verified step by step guidance

1. Understand the role of a stock exchange: A stock exchange, such as the NYSE, serves as a marketplace where securities (stocks, bonds, etc.) are bought and sold. It facilitates transactions between buyers and sellers.
2. Identify the primary activities: Members of a stock exchange typically engage in activities directly related to trading securities, such as buying and selling on behalf of clients. These activities are central to the functioning of the exchange.
3. Eliminate unrelated activities: Issuing new shares, managing company payroll, auditing financial statements, preparing tax returns, setting accounting standards, and regulating interest rates are not primary activities of stock exchange members. These tasks are typically handled by companies, auditors, or regulatory bodies.
4. Focus on client transactions: Members of a stock exchange often act as intermediaries, executing trades for clients and ensuring the smooth operation of the market. This is a key function of their role.
5. Conclude the correct answer: Based on the analysis, the primary activities carried out by members of a stock exchange are buying and selling securities on behalf of clients.