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Question : Case Study 78

GHI Ltd. is a conglomerate that has recently traded its shares on a stock exchange. The company's management is reviewing the process of placing an order.

Question : 

When an investor places an order to buy shares at a specific price, what type of order is this?

Option 1: Market order
 

Option 2: Limit order
 

Option 3: Stop order

 

Option 4: Day order


Team Careers360 9th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Limit order


Solution : The correct answer is (b) Limit order

When an investor places an order to buy shares at a specific price, it is called a "limit order." In a limit order, the investor specifies the maximum price they are willing to pay for a buy order or the minimum price they are willing to accept for a sell order. The order will only be executed if the market price reaches or matches the specified limit price. If the market price does not reach the limit price during the trading day, the order remains open until it is either executed or canceled by the investor.

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