A) If you place a stop-loss order to sell at $23 on a stock currently selling for $26.50 per share,

what is likely to be the minimum loss you will experience on 50 shares if the stock price rapidly

declines to $20.50 per share? Explain. What if you had placed a stop-limit order to sell at $23,

and the stock price tumbled to $20.50?

B) You have $100 to invest in a risky asset with an expected return of 12% and a standard

deviation of 15%. T-bill has rate of 5%. If the portfolio has an expected outcome of $115 then

how much you have invested in risky assets and how much you have invested in risk free asset?