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At 10:45 a.m., Ashley placed a stop-loss order to sell 200 shares of Alpha stock at $43 a share. At 2:15 p.m., the price of Alpha fell to $42.90 and then rose to $43.40 a share by the end of the trading day. Ashley's order was executed that day. Ashley would have received a price

A) Between $42.90 and $43
B) $43.40
C) $43.50
D) Between $43 and $43.40

User Hendrra
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1 Answer

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Final answer:

Ashley's stop-loss order to sell shares of Alpha stock at $43 per share was executed at a price between $42.90 and $43 because the stock price dropped to $42.90, which triggered her stop-loss order.

Step-by-step explanation:

The question asks at what price Ashley's stop-loss order to sell 200 shares of Alpha stock was executed, given that the stock price fluctuated during the day. A stop-loss order is designed to limit an investor's loss on a security position that makes an unfavorable move. At 10:45 a.m., Ashley placed a stop-loss order to sell the stock at $43 per share.

When the stock price dropped to $42.90 at 2:15 p.m., this would have triggered Ashley's stop-loss order, because it reached and then fell below the price she had set. Therefore, Ashley's order would have been executed at the best available price that was at or below $43, once the stop price of $43 was breached.


The correct answer is A) Between $42.90 and $43, because that was the price range when Ashley's stop-loss order would have been activated and executed.

User Carmelia
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