Question

You own 500 shares of Ups&Downs, Inc., stock. It is currently priced at $54. You are going on vacation, and you realize that the company will be reporting earnings while you are away. To protect yourself against a rapid drop in the price, you place a stop-limit order to sell 500 shares at $44. It turns out the earnings report was not so good, and the stock price fell to $34 right after the announcement. It did, however, bounce back, and by the end of the day it was back to $46. What happened in your account? What happened in your account? Select the best answer below.) O A. It is likely you sold 500 shares at $44 or less per share. O B. It is likely you sold 500 shares at $34 or more per share. O C. It is likely you sold 500 shares between $44 and $46 per share. O D. It is likely you did not sell the 500 shares.

Answer 1

Option D is correct.

It is likely you did not sell the 500 shares.

Explanation:

Stop Limit Orders are orders that are executed when a particular price is reached, which is stop price. Orders are then executed at a fixed limit price. In the above case, price did not touch $44, so it is unlikely that orders gets executed.