CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

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 ______.

A. limit order
B. market order
C. start order
Correct Answer: A

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.
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