Many people are familiar with the term “stock market,” but few actually understand what a stock market is, as well as its role in the economy.

A stock market generally refers to an exchange where investors buy and sell shares of equity securities that represent ownership in a vast array of publicly-traded companies. The most commonly cited U.S. stock exchange is the New York Stock Exchange (NYSE). Renowned U.S. companies like General Motors, Google, and AT&T all trade on the NYSE. Stock exchanges exist in many other countries across the globe, including the Tokyo Stock Exchange, Shanghai Stock Exchange and the London Stock Exchange. Typically, most of the companies that trade on an exchange in a given country are headquartered in that country.

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