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Basic Question 13 of 13
A stop-limit order is different from a simple stop order in that once the stock price reaches the preset stop price the order is converted into a ______.
B. market order
C. start order
A. limit order
B. market order
C. start order
User Contributed Comments 13
| User | Comment |
|---|---|
| Khadria | "B" is correct: http://www.sec.gov/answers/stopord.htm |
| Tomcat82 | khadria, based on that link "A" is correct: "A stop-limit order is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is reached, the stop-limit order becomes a limit order to buy or to sell at a specified price." |
| whipp | B is the correct answer if the question asked how a simple stop order is different from a stop-limit order |
| magicchip | A is correct. |
| Bududeen | i think b is correct. when the price reaches the preset price, the instrument has to be sold or bought immediately at the existing price. |
| Renaud1807 | whipp is right, single stop: market order stop limit order: limit order |
| Vikku | The question asks, how a STOP-LIMIT order is different, for which answer A makes sense. It is not asking what happens to a simple stop order when the stock price reaches the preset stop price. |
| dipu617 | I think Vikku has a point. But its still confusing. Could be A or B. I chose B but now confused... |
| 2014 | I choose B But prefer A .... |
| jonan203 | wow, you guys need to work on your reading comprehension, the question is clearly asking how a stop-limit is different from a stop, not the other way around. |
| gill15 | I chose B too |
| gill15 | Regardless...if theres a 160 questions like this one im failing |
| Inaganti6 | The CFA is almost like math. If the question asks for 2 + 2 and the answer is 4, then it's 4. I like how people actually sit here and opine about what 2 + 2 COULD BE or SHOULD BE. It's hilarious. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
compare execution, validity, and clearing instructions
compare market orders with limit orders
CFA® 2025 Level I Curriculum, Volume 3, Module 1.