erstandin Different trade orders such as market orders, limit orders, and stop-loss orders are created to give investors the liberty to manage their securities based on their expectations out of the investments. Carl purchased 200 shares of an exchange traded fund (ETF) specializing in the health care sector for $90.24 per share. Carl is comfortable holding on to his shares in the face of minor fluctuations, but does not want to risk the share value falling far below his purchase price. He therefore considers placing a order so that all 200 shares would be sold if the share price falls to $88. The following graphs depict two hypothetical paths for the share value of Carl's ETF over the course of the next six months. Complete the sentences below each graph to describe what would happen if Carl placed the preceding order under each of the two circumstances. 100 96 92 SHARE VALUE 88 84 80 0 1 2 2 3 3 5 6 60 2 3 LO 5 6 MONTHS IN FUTURE ; thus the In the preceding scenario, his order would be activated order would and executed at over the six month period. ? 100 96 92 SHARE VALUE 88 84 80 0 1 2 3 4 5 6 MONTHS IN FUTURE 96 92 SHARE VALUE 88 84 80 0 1 3 4 5 6 MONTHS IN FUTURE ; thus the In the preceding scenario, his order would be activated order would and executed at 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 erstandin Different trade orders such as market orders, limit orders, and stop-loss orders are created to give investors the liberty to manage their securities based on their expectations out of the investments. Carl purchased 200 shares of an exchange traded fund (ETF) specializing in the health care sector for $90.24 per share. Carl is comfortable holding on to his shares in the face of minor fluctuations, but does not want to risk the share value falling far below his purchase price. He therefore considers placing a order so that all 200 shares would be sold if the share price falls to $88. The following graphs depict two hypothetical paths for the share value of Carl's ETF over the course of the next six months. Complete the sentences below each graph to describe what would happen if Carl placed the preceding order under each of the two circumstances. 100 96 92 SHARE VALUE 88 84 80 0 1 2 2 3 3 5 6 60 2 3 LO 5 6 MONTHS IN FUTURE ; thus the In the preceding scenario, his order would be activated order would and executed at over the six month period. ? 100 96 92 SHARE VALUE 88 84 80 0 1 2 3 4 5 6 MONTHS IN FUTURE 96 92 SHARE VALUE 88 84 80 0 1 3 4 5 6 MONTHS IN FUTURE ; thus the In the preceding scenario, his order would be activated order would and executed at 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
