What is a stock exchange?

A stock exchange functions as a regulated marketplace specifically designed for the trading of financial instruments, including stocks, bonds, and derivatives. The regulation ensures transparency, reliability, and fairness in transactions, providing a secure environment where buyers and sellers can freely negotiate and exchange assets.

This centralized structure provides liquidity to markets, allowing investors to purchase and sell shares of publicly traded companies easily. The regulation also helps maintain investor confidence, which is critical in sustaining the overall integrity and functionality of the financial system.

The other options do not accurately encompass the concept of a stock exchange. While online trading platforms cater to retail investors, they are typically interfaces through which trades are executed rather than independent exchanges themselves. Similarly, interbank trading primarily involves transactions between financial institutions rather than a defined marketplace. Lastly, a private market for trading real estate doesn't fit the definition of a stock exchange, as it deals with a different asset class and is often less regulated than public exchanges.