ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Prices fluctuate on the basis of demand.
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Prices DO NOT fluctuate on the basis of demand.
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Either A or B
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None of the above
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Detailed explanation-1: -Stock prices change everyday by market forces. By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up.
Detailed explanation-2: -Demand factors that can affect share prices include company news and performance, economic factors, industry trends, market sentiment and unexpected events such as natural disasters. Demand gives shares value. If there is no demand for a company’s shares, they will have no value.
Detailed explanation-3: -Once stocks are on the market, which best explains how their prices are set? Prices fluctuate on the basis of demand.
Detailed explanation-4: -Which statement best describes stocks? They are an investment in a company’s progress and profits.
Detailed explanation-5: -Once a company goes public and its shares start trading on a stock exchange, its share price is determined by supply and demand in the market. If there is a high demand for its shares, the price will increase.