Understanding the Stock Market

What is the primary function of a stock market?

• To provide a platform for buying and selling real estate

• To offer loans to small businesses

• To facilitate the trade of stocks and securities

• To regulate international trade

How does the stock market contribute to economic development?

• By offering free financial advice to investors

• By controlling inflation rates

• By providing a platform for companies to raise capital

• By ensuring all companies are profitable

What is the difference between a stock market and a stock exchange?

• A stock market only deals with government bonds

• They are two names for the same concept

• A stock exchange is a component of a larger stock market

• A stock market is a type of stock exchange

Which are the two most significant stock exchanges in the United States?

• Shanghai Stock Exchange and Hong Kong Stock Exchange

• Bombay Stock Exchange and Toronto Stock Exchange

• London Stock Exchange and Tokyo Stock Exchange

• New York Stock Exchange and NASDAQ

How do individual investors benefit from the stock market?

• By getting free shares from companies

• By avoiding all financial risks

• By receiving government subsidies

• By creating and maintaining wealth