An order to buy or sell a security at the best available price is a ______________.
A. limit order
B. market order
C. stop loss order
D. stop buy order
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What does a stop order to buy Facebook at $50 mean (3 points)? Can you place this order if the current stock price of Facebook is $55 (2 points)? Why may an investor who is not short a stock place a buy stop order (5 points)?
Suppose you short-sell 100 shares of IBM, now selling at $178 per share. a. What is your maximum possible loss?. What happens to the maximum loss if you simultaneously place a stop-buy order at $192.50? (Do not round intermediate calculations. Input the amount as a positive value.) Maximum loss $
1. What is the difference between each pair of items? a) listed and unlisted securities b) brokers and market makers c) full- service and discount brokerage firms d) primary and secondary markets e) market order and good- till- canceled order f) cash account and margin account
2. When would you use a stop- loss order?
3. Why is it riskier to buy stock on margin?
4. The following questions concern short selling: a) When should an investor sell short? b) How can investors sell stock they do not own? c) How is a short position closed? d) How does the investor profit from a short sale? e) What is the risk associated with a short position?
5. How are the SIPC and FDIC similar? Why are securities laws frequently referred to as