SIE practice questionmediumOrder Types - Limit Order
A client places a limit order to buy stock at $20. The stock’s current price is $23. What must happen for the order to execute?
- AThe market price must rise to $25
- BThe market price must fall to $20 or lower✓ Correct answer
- CThe stock must split
- DThe stock goes ex-dividend
Explanation
Why B — The market price must fall to $20 or lower
A buy limit order only executes at the limit price or lower, not at higher prices, after a split, or ex-dividend.
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