What is the role of a market maker?

A market maker plays a crucial role in the financial markets primarily by providing liquidity. The correct answer highlights that a market maker sells securities to investors for their own account, which underscores their function in facilitating trades by maintaining a consistent supply of shares.

Market makers operate by standing ready to buy and sell securities, thereby ensuring there is always a market for those securities. This helps to reduce price volatility and allows transactions to occur more smoothly, as they take on the risk of holding inventory and can respond to market demand by adjusting prices.

While options mentioning buying and selling securities for customer accounts, providing research and analysis, or offering personal investment advice are involved in different financial services, they do not accurately reflect the primary function of a market maker. Market makers focus on liquidity and pricing rather than directly managing client portfolios or providing customer-specific advice.