Home| Course Catalog| Career Planning

Free Online Course on Personal Finance

Site Search

Case Study #2 Answers

a.  Because the stop-loss order price of $53.00 is set so closely to the recent close of $53.75, it is likely that the stock will be sold when the stock fluctuates around its closing price. When stop-loss orders are set too close to the market price, the chance of the price declining results in too much trading. This generates high commission costs and taxes for the seller. Steve should hold for the long term and put his stop-loss orders farther away from the current price.

b. Steve should set his stop-loss order to safeguard against a major fluctuation, not a minor fluctuation. A stop-loss price of $49 or $50 would be more appropriate; this price is 7 to 10 percent below the current market price.


Our Network Of Sites:
Apply 4 Admissions.com              | A2ZColleges.com  | OpenLearningWorld.com  | Totaram.com
Anatomy Colleges.com                | Anesthesiology Schools.com  | Architecture Colleges.com | Audiology Schools.com
Cardiology Colleges.com            | Computer Science Colleges.com| Computer Science Schools.com| Dermatology Schools.com
Epidemiology Schools.com         | Gastroenterology Schools.com  | Hematology Schools.com     | Immunology Schools.com
IT Colleges.com                | Kinesiology Schools.com  | Language Colleges.com  | Music Colleges.com
Nephrology Schools.com             | Neurology Schools.com  | Neurosurgery Schools.com | Obstetrics Schools.com
Oncology Schools.com    | Ophthalmology Schools.com | Orthopedics Schools.com       | Osteopathy Schools.com
Otolaryngology Schools.com| Pathology Schools.com  | Pediatrics Schools.com  | Physical Therapy Colleges.com
Plastic Surgery Schools.com| Podiatry Schools.com  | Psychiatry Schools.com   | Pulmonary Schools.com 
Radiology Schools.com| Sports Medicine Schools.com| Surgery Schools.com | Toxicology Schools.com
US Law Colleges.com| US Med Schools.com | US Dental Schools.com

About Us Terms of Use | Contact Us | Partner with Us | Press Release | Sitemap | Disclaimer | Privacy Policy

©1999-2011 OpenLearningWorld . com - All Rights Reserved