
Explanation:
A stop-loss sell order at $30 best meets the dual objectives because:
Retains ownership during price increases: The stop-loss order only triggers when the stock price drops to $30, allowing the investor to continue holding the stock as long as it's going up
Exits position on price decline: Once the stock drops to $30, the stop-loss order becomes a market order and executes at the best available price, completely exiting the position
Why other options don't work:
$37: Would only execute if price reaches $37 or higher, but provides no protection if price drops below $30$30: May not execute if market gaps below $30, potentially leaving the position exposed to further lossesThe stop-loss order provides the automatic exit protection while allowing unlimited upside potential.
Ultimate access to all questions.
Assume you have a long position in a stock with a current market price of $35. You have two goals. First, to retain ownership as long as the stock continues to go up. Second, to exit the position completely if the stock drops below $30. Which order best meets your dual objectives?
A
Sell market order
B
Sell limit order at $37
C
Stop-loss sell order at $30
D
Stop-and-limit sell order at $30
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