Which of the following statements best describes the stock market?

• A. It is a government agency that sets interest rates for banks.
• B. It is a market where only government bonds are bought and sold.
• C. It is a system for exchanging goods and services without using money.
• D. It is a marketplace where shares of publicly held companies are issued and traded.

Answer: (D)

Verified step by step guidance

1. Understand the definition of the stock market: it is a marketplace where shares of publicly held companies are issued and traded.
2. Recognize that the stock market is not a government agency and does not set interest rates for banks; that role belongs to central banks or monetary authorities.
3. Note that the stock market involves trading shares (equity), not just government bonds; government bonds are traded in bond markets, which are separate.
4. Identify that the stock market is not a barter system; it involves buying and selling financial assets using money.
5. Conclude that the best description of the stock market is a marketplace for issuing and trading shares of publicly held companies.