Increase in OTC Trading Relative to NYSE Trading Over Time

OTC Trading vs. NYSE Trading: A Shift in Market Dynamics

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Question

The increase in OTC trading relative to NYSE trading over time

Answers

A. is a sign of growing government regulation of the NYSE.

B. is a sign of the increased influence of institutional investors.

C. is a sign of the increased influence of individual investors.

D. demonstrates the decreasing level of speculative activity.

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Explanations

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A. B. C. D.

Irrespective of the level of speculative activity in the market, there has been a trend toward relatively high volume on the OTC compared with the NYSE. This is partly an indication of the growing importance of individual investors, who are more prone to invest in the OTC market, and of the growing number of firms listed on the OTC relative to the NYSE.

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