Differentiate between Formal markets and over-the-counter markets.

CPA-Financial-Management-Section-3 Revision kit

Formal markets and over-the-counter markets
Formal markets are organized security exchanges which deal with specific instruments. The operation of such formal markets is highly regulated, accessible to a few and deal with standardized instruments.

Over the counter markets are formal arrangements through which the interested parties transact. The deals in this market may be concluded over the phone or through computer terminals.

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