If an individual investor places a limit order at $38 and the stock currently sells for $41 per share, the broker will buy the stock for the investor.

Question

Quizplus · Accepted Answer

A limit order to buy at $38 means the investor is only willing to buy the stock if the price drops to $38 or lower. Therefore, if the current market price is $41, the broker will not execute the order as it is above the investor's limit price.

If an Individual Investor Places a Limit Order at $38