Angela Johnson bought Microsoft stock many years ago when the company was very young;so,clearly,she has done very well with her investment.Now that Microsoft is more established,its stock price has started to falter somewhat.Angela really thinks that Microsoft will continue to be a good investment in the future,so she plans to stay in the stock for the time being.However,at the same time,she wants to protect the profits she has already amassed.She follows the market every day,so she is confident she can initiate a sell order when necessary to ensure she receives the gains she has realized to this point.Unfortunately,Angela is leaving the country for an extended vacation in China,where she will be out of touch with the investment world,and she is worried that something might happen to Microsoft during the time she is gone that will substantially decrease the "paper" profits she now has.Given that Angela believes Microsoft will continue its upward movement but she also wants to protect her "paper" profits,which of the following orders should she place with her broker before she leaves for China?
A) Market sell
B) Stop (sell)
C) Limit (sell)
D) Fill or kill
E) Margin sell

Question

Quizplus · Accepted Answer

A stop (sell) order is appropriate in this scenario because it allows Angela to set a specific price at which her Microsoft stock will be sold if the market price drops to that level, thus protecting her from significant losses while she is unable to monitor the stock. This type of order helps safeguard her profits without requiring her to sell immediately, aligning with her belief in the stock's future potential and her need to protect her gains while she is away.

Angela Johnson Bought Microsoft Stock Many Years Ago When the Company