Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cincinnati Financial Corp (CINF) common stock is currently trading at $79 per share. a. (5) Suppose an investor places a limit buy order with

 

Cincinnati Financial Corp (CINF) common stock is currently trading at $79 per share. a. (5) Suppose an investor places a limit buy order with a limit price of $65. Explain what this means and why an investor might place this order. b. (5) If CINF stock immediately drops from $79 to $62, what will happen based on the limit order above? c. (5) If CINF stock immediately drops from $79 to $62, what will happen if the investor had instead placed a limit sell order with a limit price of $65? d. (5) Explain why an investor would place a limit buy order with a limit price of $80 when CINF is trading at $79. e. (5) If CINF is trading at $79, explain a stop limit buy order using stop and limit prices of your choosing.

Step by Step Solution

3.39 Rating (127 Votes )

There are 3 Steps involved in it

Step: 1

a Placing a limit buy order with a limit price of 65 means that the investor is willing to buy shares of Cincinnati Financial Corp CINF common stock but only at a price of 65 or lower This type of ord... blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Taxes And Business Strategy A Planning Approach

Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon

5th Edition

132752670, 978-0132752671

More Books

Students also viewed these Finance questions