Why do stock prices change?
Show answer & explanation
Answer: Buyer and seller agreement
Random computer algorithms — Wrong. Algorithms do participate in trading, but they're not random—they follow rules based on market data. Stock prices are set by what buyers and sellers agree to pay.
Buyer and seller agreement ✓ — Correct! Stock prices change based on supply and demand. When more people want to buy a stock, the price goes up. When more want to sell, it goes down. Investors buy or sell based on company performance, news, and future expectations. It's like an auction happening all day long!
Company decides the price — Wrong. Companies don't set their own stock prices after the initial public offering. The market determines prices through buying and selling activity.