5
QuizMultiple Choice

Investing and Financial Markets

Question 5 • Personal Finance - EL3403

Once stocks are on the market, which best explains how their prices are set?

Answer
A
Prices are controlled by the issuing company.
B
Prices are set by the financial market.
C
Prices follow economic trends.
D
Prices fluctuate on the basis of demand.

Explanation

After shares are issued, investors buy and sell them in the market. Their trading changes the balance between buyers and sellers, so prices rise when demand is strong and fall when demand weakens. Therefore, prices fluctuate on the basis of demand.

AI-written and checked against the verified answer.

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