Which of the following best describes a dealer's quote in the OTC market?

A dealer's quote in the over-the-counter (OTC) market is best described as "firm for a specified quantity." This means that when a dealer provides a quote, they are essentially committing to buy or sell a specific quantity of a security at the stated price. This type of quote provides clarity and assurance to both the dealer and the investor, as it establishes a transactional obligation.

In the OTC market, dealers act as intermediaries and use their own inventories to facilitate trades. When a dealer issues a firm quote, it indicates their willingness to transact at that price for a predetermined number of shares or units. This allows investors to make informed decisions based on a clear offer.

Other descriptions, such as indicative and non-binding, refer to quotes that suggest potential prices but do not create an obligation to buy or sell. Quotes that are variable based on market conditions highlight price changes due to supply and demand fluctuations but do not convey the certainty and commitment involved in a firm quote. Lastly, stating that quotes are only applicable to institutional investors is misleading, as dealer quotes are relevant for all participants in the market, regardless of whether they are individual or institutional investors.