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lilavasa [31]
3 years ago
6

Arianna just made another fantastic​ investment: She purchased 400 shares in Great Gains Corporation for ​$20.0920.09 per share.

Yesterday the stock closed at ​$54.1254.12 per share. In order to lock in her​ gains, she has decided to employ a​ stop-loss order. Assuming she set the order at ​$53.7353.73​, what is likely to​ happen? Why might this not be a wise​ decision? At what price would you recommend setting the​ stop-loss order?​ Why?
Business
1 answer:
Gwar [14]3 years ago
8 0

<u><em>Answer:</em></u>

<u><em>1. Likely the price of the stock either goes up or falls</em></u>

<u><em>2. There is no need for a stop loss order in this scenario.</em></u>

<u><em>3. 5412541.2</em></u>

<u>Explanation</u>:

1. Stock market prices are often  unstable, prices can be up today, the next day they are low.

2. Arianna has already made over 100% profit from the stock since she purchased at a good low price, yesterday's stock close price was still profit for her.

3. A 10% Stop loss price would have been the idea order price rather than the ​$53.7353.73​.

4. Remember Stop loss order are meant to reduce or minimize the loss of investor or trader, a <em>calculated level </em>of  should be carefully decided.

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The correct answer is 10.9 times.

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3 years ago
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