CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

A security is trading at a price of 35.68. An investor places an order to buy the security once the price reaches $35.95. This is a ______.
A. stop-buy order
B. limit-buy order
C. stop-limit order
Explanation: A stop-buy order is placed above the current price. A limit-buy order is placed below the current price.

User Contributed Comments 8

User Comment
danlan Stop order: stop loss; limit order: get gain
george2006 this can be a stop order or stop-limit order. but perhaps, A is more correct.
christine if investor is short the position, then this is a stop-loss buy order
stevelaz Could be a limit order (i.e. buy or sell at a specfied price)
tagr No, this is not a limit order nor a stop-limit order, because no limit price is indicated. Once the price reaches the stop price of 35.95 the stop order will turn into a market order and the security will be bought at the prevailing market price, which could be more or less than 35.95. There is no guarantee regarding the price, because no limit is indicated.
solnce This is certainly a stop-buy order. I am a FX dealer. :))))
mekc thx for the explanation tagr & solnce
petervinh18 Cannot put "limit order" if intended to purchase stock above actual stock price then it will consider as "market order" So, stop-buy would be more correct one.
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