SIE practice questionmediumOrder Types
A stop order is typically used to:
- ALock in a coupon payment
- BGuarantee a specific price
- CLimit losses on a stock position✓ Correct answer
- DAvoid paying capital gains tax
Explanation
Why C — Limit losses on a stock position
A stop order is triggered at a price to limit losses. It does not guarantee prices (B), relate to coupon payments (C), or tax avoidance (D).
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