Description
For this week's activity, go to the Strayer library search page and use your textbook to answer the following questions using the Week 7 Investments Template [DOCX].
- Describe the differences among the following three types of orders: market, limit, and stop loss. Provide examples of each in your own words.
- What is a short sale of stock? Provide an example in your own words.
- Use your textbook to define the term short sale as it pertains to stock.
- Describe buying on margin. Provide an example in your own words.
- Why is it illegal to trade on insider information? Provide an example in your own words.
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Explanation & Answer
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Week 7 Homework: Definitions
Your Name
FIN100: Principles of Finance
Instructors Name
Date
Week 7 Homework
Instructions: Please respond to the following questions:
1. Describe the differences among the following three types of orders: market, limit, and
stop loss. Provide examples of each in your own words.
Your Answer:
A market order involves purchasing a stock at the best price available in the market. This
type of order ensures there is the sale of the stock but does not specify the price (Mitchell
& Chen, 2019). It is an order which optimal when the main goal is to carry out a trade
promptly. A market order is typically utilized when one thinks the stock price is right and
when an individual is sure they want to fill out an order. As well, it is used when a person
aims to have an immediate execution....
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