The following quote is taken from Wayne \(H\). Wagner, "The Taxonomy of Trading Strategies," in Katrina F. Sherrerd (ed.), Trading Strategies and Execution Costs (Charlottesville, VA: The Institute of Chartered Financial Analysts, 1988).

When a trader decides how to bring an order to the market, he or she must deal with some very important issues; to me, the most important is: What kind of trade is this? It could be either an active or a passive trade. The type of trade will dictate whether speed of execution is more or less important than cost of execution. In other words, do I want immediate trading (a market order); or am I willing to forgo the immediate trade for the possibility of trading less expensively if I am willing to "give" on the timing of the trade (a limit order)?

a. What is meant by a market order?

b. Why would a market order be placed when an investor wants immedjate trading?

c. What is meant by a limit order?

d. What are the risks associated with a limit order?