Which of the following are main types of financial instruments traded in the stock market?

The selected answer encompasses the principal categories of financial instruments commonly traded in the stock market. Stocks represent ownership in a company, while bonds are a form of debt investment where an investor loans money to an issuer for interest payments. Options are contracts that give the holder the right to buy or sell an underlying asset at a predetermined price, adding additional versatility to trading strategies.

Furthermore, exchange-traded funds (ETFs) represent a collection of investments that track a specific index and can be traded like stocks, offering investors diversification with the ease of stock-like trading. Mutual funds pool money from multiple investors to purchase a diversified portfolio of stocks, bonds, or other securities, providing an accessible way for individuals to invest in a diverse array of assets.

This answer highlights the comprehensive nature of financial instruments available in the stock market, reflecting a broader understanding of the various ways investors can engage with and allocate their resources within this environment. Other choices may limit the scope of financial instruments considered, thereby not accurately representing the full array of instruments traded in the stock market.