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Answer: Execute at the best available price once a trade occurs at the specified price or a better price.
**Explanation:** A is correct. A market-if-touched (MIT) order executes at the best available price once a trade occurs at the specified or better price. This type of order is used when a trader wants to enter or exit a position when the market reaches a specific price level. B is incorrect. This describes a stop order, which executes at the best available price once a bid or offer occurs at the specified or worse price. Stop orders are typically used to limit losses or protect profits. C is incorrect. This describes a discretionary order, which gives the broker discretion to delay execution to get a better price within specified parameters. D is incorrect. This describes a fill-or-kill (FOK) order, which must be executed immediately in its entirety or not at all.
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A portfolio manager at an asset management firm is examining an existing portfolio to determine if it still holds an optimal asset mix based on the firm's latest market expectations. The manager identifies a long position in a futures contract that is no longer consistent with the goals of the portfolio and wants to close out the position using a market-if-touched order. Which of the following actions would be consistent with the use of this type of order?
A
Execute at the best available price once a trade occurs at the specified price or a better price.
B
Execute at the best available price once a bid or offer occurs at the specified price or a worse price.
C
Allow a broker to delay execution of the order to get a better price.
D
Execute the order immediately or not at all.