Which statement best describes customer flow versus proprietary trading on a sell-side desk?

• A. Proprietary trading executes client orders for a fee; customer flow takes positions with the firm's capital to profit.
• B. Customer flow uses the firm's capital to take positions; prop trading executes client orders for a fee.
• C. Both functions have identical risk profiles and compensation.
• D. Customer flow executes client orders for a fee; proprietary trading uses the firm's capital to take positions to profit from market movements.

Answer: (D)