Final answer:
A broker is an agent who facilitates trades between buyers and sellers of equity securities. They act as intermediaries on behalf of clients and are not the same as floor traders, capitalists, principals, or dealers.
Step-by-step explanation:
An agent who arranges a transaction between a buyer and a seller of equity securities is known as a broker. A broker serves as an intermediary, facilitating trades on behalf of clients but not taking a principal role in the transactions. The role of a broker is distinct from that of a floor trader, capitalist, principal, or dealer, as brokers do not trade for their own account but rather help clients buy and sell securities.
Stock exchanges are the hubs where these transactions often take place. Companies list their stock on an exchange to raise capital from investors, and trading occurs on the exchange floor or electronically. Buyers and sellers in these markets must be well informed and able to compete with each other independently. Brokers help ensure that their clients can effectively engage in these markets.