Cincinnati Financial Corp (CINF) common stock is currently trading at $79 per share. a. (5) Suppose...
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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. 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.
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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... View the full answer
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ISBN: 9780132752671
5th Edition
Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon
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