If an investor places a _________ order the stock will be sold if its price falls to the stipulated level.If an investor places a __________ order the stock will be bought if its price rises above the stipulated level.

Question

Quizplus · Accepted Answer

A stop-loss order is placed below the current market price to protect against further losses. A stop-buy order is placed above the current market price to benefit from a potential price increase. Therefore, a stop-loss order is used to sell a stock if its price falls to the specified level, while a stop-buy order is used to buy a stock if its price rises above the specified level. Option C correctly identifies the order type and their specific functions.

If an Investor Places a _________ Order the Stock Will