A Stock That You Purchased at a Price of $22

question 101

Multiple Choice

A stock that you purchased at a price of $22 per share has risen to $46 per share. You wish to avoid losing all of your profit while still allowing an opportunity for additional gains; therefore, you should put in a sell stop order at a price of

• A) $22 per share.
• B) $40 per share.
• C) $47 per share.
• D) $53 per share.

---

Definitions:

Market

A medium that allows buyers and sellers to exchange goods, services, or information.

Highly Competitive Market

A market structure characterized by a large number of sellers and buyers, leading to competitive pricing and minimal market power for individual firms.

Security Market Line

A representation in the capital asset pricing model (CAPM) that displays the relationship between the expected return of a security and its systemic risk.

Beta

A statistic that measures the volatility of a stock or portfolio compared to the market as a whole, used in the CAPM to calculate cost of equity.