Question

Suppose you bought 100 shares of IBM at $200 per share. What is the maximum loss if you place a stop-loss order at $180? Your Answer: Answer Question 10 (1 point) Here is some price information in Fincorp stock. Suppose that Fincorp trades in a dealer market. Bid 55.25 Asked 55.50 Suppose you have submitted an order to your broker to buy at market. What will happen? The trade will be executed at $55.50 The trade will not be executed until the ask price decreases The trade will not be executed until the bid price increases The trade will be executed at $55.25

Answer 1

First part:

The Stop loss order will ensure the stock is sold at $ 180 limiting the loss to $ 20 per share ($200 - $180)

For 100 shares, the maximum loss would then be = 100 * $20 = $200

Question 10:

Ask price is the best available price that a seller is ready to sell at current time.

If you ask the broker to buy at the market price, your trade will be executed at the ask price.

Hence, the trade will be executed at $55.5