An Analyst Has a Limit Order Outstanding on a Stock

question 22

Multiple Choice

An analyst has a limit order outstanding on a stock.He argues that the probability that the order will execute before the close of trading is 0.20.Thus,the odds for the order executing before the close of trading are ________.

• A)1 in 4
• B)1 in 5
• C)4 to 1
• D)5 to 1

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Definitions:

Variable Manufacturing Costs

Costs that vary in proportion to changes in the level of production, including direct materials, direct labor, and variable overhead.

Operating Income

Earnings before interest and taxes (EBIT), calculated by deducting operating expenses, including the cost of goods sold (COGS) and other operating expenses, from gross profit.

Fixed Overhead

A type of business expense that does not change with the level of production or sales, such as rent, salaries, and insurance.

Selling Costs

Expenses associated with the selling process, including advertising, sales commission, and shipping costs.