Question

You own 500 shares of Ups&Downs, Inc., stock. It is currently priced at $56. You are going on vacation, and you realize that the company will be reporting earnings while you are away. To protect yourself against a rapid drop in the price, you place a stop-limit order to sell 500 shares at $46. It turns out the earnings report was not so good, and the stock price fell to $36 right after the announcement. It did, however, bounce back, and by the end of the day it was back to $48. What happened in your account? What happened in your account? (Select the best answer below.) O A. It is likely you sold 500 shares at $36 or more per share. O B. It is likely you sold 500 shares between $46 and $48 per share O C. It is likely you sold 500 shares at $46 or less per share. O D. It is likely you did not sell the 500 shares

Answer 1

Solution:
Given:
No of Shares owned	500 Shares
Current Price per share	$56
Stop limit order price per share	$46
Stop Limit order is a type of order in the financial market that specify, the maximum amount
at which you are willing to buy a stock i.e stop limit buy order or the minimum amount at which are
willing to sell a stock i.e stop limit sell order.
As you have placed a Stop limit sell price at $46 ,which means minimum price for the sale of share is
fixed at $46, if the selling price falls to $36 sale will not be executed.Sale will be executed at $46 or more.
As the share price rose to $48 Per share, it is likely you sold your share between $46 and $48
B) It is likely you sold 500 shares between $46 and $48 per share