General Securities Representative (Series 7) Practice Exam – Your All-in-One Guide to Exam Success!

The correct answer is the broker's broker. A broker's broker is specifically designed to act as an intermediary for other brokers, facilitating trades without taking a principal position in the market. This means they do not make a market in securities nor do they trade for their own account, ensuring their role is primarily to assist other brokers in executing trades away from the public market.

In contrast, market makers provide liquidity by continuously buying and selling securities and thus do engage in trading for their own account. Inter-dealer brokers also execute trades but can work with various dealers in the market, helping them find counterparties to transactions without taking on a direct market-making role. Institutional traders, meanwhile, work for large financial institutions and are often involved in trading securities for their own firm, including secondary issues. Therefore, the broker's broker stands out due to its distinctive role of purely facilitating transactions for other brokers without participating in the market as a trader.