SIE Exam Question 127: Answer and Explanation

Question: 127

Which of the following is an example of a limit order?

• A. An order to sell 100 shares of XYZ at the best price available
• B. An order to sell 100 shares of XYZ (currently trading at $50) if the price drops to $45
• C. An order to buy 100 shares of XYZ at the best price available
• D. An order to buy 100 shares of XYZ at $40 or less

Correct Answer: D

Explanation:

An order to sell a stock at a specific price or better is a limit order. Answers A and C are examples of a market order. Answer B is an example of a stop order.