It helps to understand that asking how someone is at the start of a conversation should generally be interpreted as a social convention rather than a literal question.
The socially correct response is either something like "fine", or to repeat the question. Note that if you're going to answer it as a question, the correct answer is always "fine" regardless of whether one really is fine; if you said something like "terrible" you'd be obliging a stranger to pry into your personal business. The fabric of society is very complex, as someone once said.
These are all valid in various dialects/registers of native English:
