A Stop Order Is an Order to Buy or Sell

question 14

Multiple Choice

A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price,known as the stop price.When the specified price is reached,your stop order becomes a market order,The advantage of a stop order is

• A)you don't have to monitor how a stock is performing on a daily basis.
• B)the stop price can be activated by a short-term fluctuation in a stock's price.
• C)once your stop price is reached, your stop order becomes a market order and the price you receive may be much different from the stop price, especially in a fast-moving market where stock prices can change rapidly.
• D)all of the above are advantages

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Definitions:

Market Value

The ongoing rate at which a commodity or service is offered for buying or selling in the market.

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Cash Dividends

Payments made by a corporation to its shareholders in the form of cash out of its earnings.

Market Value

The current price at which an asset or service can be bought or sold, determined by supply and demand in the market.