When a Stop-Loss/profit Order Is Taken, the Rate Specified in the Order

question 59

Multiple Choice

When a stop-loss/profit order is taken, the rate specified in the order:

• A) must be transacted regardless of where the market moved
• B) must be transacted if a broker confirms that the specified rate was reached
• C) cannot be taken as a fixed-price guarantee unless agreed in writing
• D) will always be the stop loss rate, if the order is executed

---

Definitions:

Herfindahl Index

A measure of the size of firms in relation to the industry and an indicator of the amount of competition among them, calculated as the sum of the squares of the market shares of each firm within the industry.

Conglomerate Merger

A type of merger in which firms involved are in unrelated business activities, aiming for diversification and risk minimization.

Vertical Merger

A combination of two or more companies at different stages of production or distribution in the same industry.

Price-Fixing Arrangement

An agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, thereby manipulating market conditions.