Question

Which one of the following statements is false? A “Fill or Kill” is a limit order...

Which one of the following statements is false?

A “Fill or Kill” is a limit order to buy stocks at a certain price. If the prevailing price is higher than what is specified, the order is cancelled

A market order is simply an order to buy or sell a stock immediately at the prevailing market price.

If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if and when the share price falls below $45.

A limit-sell order is where investors specify prices, higher than the current market price, at which they are willing to sell a security.

A limit stop-sell order is where investors specify prices, higher than the current market price, at which they are willing to sell a security.

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Answer #1

If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if and when the share price falls below $45.

This is the false statement

A limit order is an order where one wishes to buy or sell securities at a certain price. A limit buy order will be executed at a price or below the price you have specified

In this case the limit is given as $50, so limit-buy order will be executed as soon as price reaches $50 or below $50 and not below $45 as stated in the statement.

So the statement is false.

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