5. Understanding limit and stop orders Understanding How Trade Orders Work Difterent trade orders such as market orders, limit orders, and stop-loss orders are created to olvo imentors the liberty to manage their securities based on their expectations out of the investments. Charles purchased 150 shares of an exchange traded fund (EIF) specializing in consumer staples for 590.24 per share. Chartes is cornfortable holding on to his shares in the face of minor fluctuations, but does not want to risk the share vatue falling far betow his purchase price. He therefore considers placing a order s0 that all 150 shares would be sold it the share price falls to 588. The following graphs depict two hypothetical paths for the share value of Charles's Erf ower the course of the next six monthe. Complete the sentences below each graph to describe what would happen if charles placed the preceding order under each of the two circumstances. In the preceding scenario, his order wosild be activated D. this the order watld over the ske menth perlad. In the preceding scenario, his order would be activated and executed at thus the order would over the six month period. True or False: If instead the stock price had risen steadily and never fallen below $88, placing the order would have acted as a safeguard but would have had no real effect. True False