SIE Exam Question 719: Answer and Explanation

Question: 719

An investor sold short 25 shares of Omikron stock at a price of $98.50 per share. She also simultaneously placed a "good-till-cancelled, stop 102, limit 107 buy" order. Excluding transaction costs, what is the investor's maximum potential loss?

• A. $208.50
• B. $210.50
• C. $212.50
• D. $214.25

Correct Answer: C

Explanation:

($107 - $98.50) × 25 shares = $212.50