Mark Just Placed a Stop Limit Order to Sell 100

question 67

Multiple Choice

Mark just placed a stop limit order to sell 100 shares at $21 stop, $18 limit. Which one of the following statements is correct concerning this order if the current market price is $16?

• A)As soon as the price rises to $18, the stock will be sold.
• B)The stock will sell for at least $18 but less than $21.
• C)The stock will sell for $18 a share as soon as the price hits $21.
• D)The order will become a limit order to sell at $21 once the market price reaches $18.
• E)The order will become a limit order to sell at $18 once the market price reaches $21.

---

Definitions:

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true; a measure of the risk of making a Type I error.

Test Statistic

A calculated value used in statistical testing to determine whether to reject the null hypothesis.

T Value

A measure derived in a t-test that shows the size of the difference relative to the variation in your sample data.

T Test

A statistical hypothesis test used to determine if there is a significant difference between the means of two variables.