You have been watching a stock that has dramatically increased in price for the last several days.Today it closed at $50 per share.You want to purchase this stock in the morning using your online brokerage account.You are willing to pay up to $53 a share but no higher.What type of purchase order should you use?
A)A stop-loss order
B)A good-til-cancel order
C)A market order
D)A limit order

Question

Quizplus · Accepted Answer

A limit order allows you to set a maximum price you're willing to pay for the stock, in this case $53 per share. This ensures that you don't overpay for the stock and stay within your budget.

You Have Been Watching a Stock That Has Dramatically Increased