When a stop-loss/profit order is taken, the rate specified in the order:
A) Must be transacted regardless of where the market
B) Must be transacted if a broker confirms that the r
C) Cannot be taken as a fixed-price guarantee.
D) None of the above.

Question

Quizplus · Accepted Answer

A stop-loss/profit order is an instruction to a broker to automatically sell or buy a security when it reaches a certain price point. However, it does not guarantee that the order will be executed at the specified rate, as market conditions can change rapidly, resulting in slippage. Therefore, the rate specified in the order cannot be taken as a fixed-price guarantee.

When a Stop-Loss/profit Order Is Taken, the Rate Specified in the Order