Which of the following is considered a legitimate business practice?

The practice of inter-positioning customer orders for better execution refers to the legitimate and acceptable practice of routing customer orders through a broker-dealer's position to seek the best possible execution price. This process involves ensuring that customers receive an optimal fill on their orders, which can benefit them by securing better pricing and improving overall trading outcomes. This practice is aligned with the principles of fair dealing and best execution standards that are expected in the securities industry.

In contrast, executing a firm order with material nonpublic information, changing inventory positions ahead of a research report, and inter-positioning customer orders without a legitimate purpose are considered unethical and illegal. They can compromise the integrity of the market and violate regulations designed to protect investors, such as insider trading rules and fair market practices. Therefore, the option acknowledges the importance of compliance with regulatory standards and serving customers in a fair manner, solidifying it as a legitimate business practice.