Which of the following best describes a stock market?

• A. A market where only private company shares are exchanged.
• B. A market where only government bonds are traded.
• C. A market where a company's stocks and derivatives are bought and sold.
• D. A market exclusively for trading commodities like oil and gold.

Answer: (C)

Verified step by step guidance

1. Understand the concept of a stock market: A stock market is a platform where shares of publicly traded companies, as well as derivatives, are bought and sold. It facilitates the exchange of ownership in companies and provides liquidity to investors.
2. Analyze the options provided in the question: Carefully read each option and determine whether it aligns with the definition of a stock market.
3. Option 1: 'A market where only private company shares are exchanged.' This is incorrect because private company shares are not traded on the stock market; they are typically exchanged in private transactions.
4. Option 2: 'A market where only government bonds are traded.' This is incorrect because government bonds are traded in bond markets, not stock markets.
5. Option 3: 'A market where a company's stocks and derivatives are bought and sold.' This is correct because it matches the definition of a stock market, where publicly traded company shares and derivatives are exchanged.