A stop-loss order:
A) is the quickest way to have an order filled.
B) allows buy orders to be filled at the lowest price.
C) allows stocks to be purchased at the current market price.
D) sells a stock when the market price drops below a specified price.
E) is used to buy stocks at a 10% margin.

Question

Quizplus · Accepted Answer

A stop-loss order is used to sell a stock when the market price drops below a specified price. This helps investors limit their losses if the stock price declines. The other choices are incorrect as they do not accurately describe a stop-loss order.

A Stop-Loss Order