Which of the following statements concerning market and limit orders are correct?
I.Market orders guarantee both a price and an execution.
II.Market orders guarantee an execution but not a price.
III.Limit orders guarantee a price but not an execution.
IV.Limit orders guarantee both a price and an execution.

Question

Quizplus · Accepted Answer

Market orders guarantee an execution but not a price because they are executed at the best available price in the market. Limit orders guarantee a price but not an execution because they specify a price at which the investor is willing to buy or sell, but there is no guarantee that the order will be executed if the market does not reach that price. Therefore, only statement II and III are correct. Statements I and IV are incorrect.

Which of the Following Statements Concerning Market and Limit Orders