Limit Order

B is correct. Maria should use a buy limit order at $85. This order will only execute if TechCo trades at $85.00 or lower (the limit price or better for a buyer means lower prices). This gives Maria exact price control, ensuring she pays no more than $85 per share. Since she is not in a hurry and can wait for the price to reach her target, the lack of execution guarantee is acceptable.

A is incorrect because a market order would execute immediately at the current price of $87, which exceeds Maria's maximum acceptable price of $85. Market orders prioritize execution certainty over price control. C is incorrect because a sell limit order is used when selling shares, not buying them. Additionally, the direction is backwards (sell limits execute at the limit or higher). D is incorrect because stop orders are typically used to trigger purchases when prices rise above a threshold (buy stop) or protect against losses (sell stop), not to set maximum purchase prices. A stop at $85 would trigger when the price falls to $85, then execute as a market order (potentially at any price).

C is correct. The defining characteristic of a limit order is that it guarantees price control (execution at the limit price or better) but does NOT guarantee execution. If the market never reaches the specified limit price, the order remains unfilled. This is the fundamental tradeoff: price certainty versus execution certainty.

A describes a market order (guarantees execution but not price), not a limit order. B is incorrect because limit orders do NOT guarantee execution at all. they only execute IF the market reaches the limit price, which may never happen. D is incorrect because no order type guarantees both immediate execution AND price control. Market orders provide immediate execution without price control; limit orders provide price control without execution guarantee.

C is correct. A sell limit order at $62 will execute when the stock trades at $62.00 or HIGHER. For sell limit orders, "or better" means higher prices because the seller wants to receive more money. The order will fill at $62.00, $62.50, $63.00, or any price above $62, but NOT at any price below $62.

A is incorrect because $60 or lower is below the $62 limit price, and sell limit orders do not execute below the limit. B is incorrect because $61.00 is still below the $62 limit price. While $61 is close, it does not meet the "limit or better" requirement for a sell order (which means $62 or higher). D is incorrect because limit orders do not execute immediately at the current market price unless that price meets the limit condition. Since the current price ($60) is below the sell limit ($62), the order will NOT execute yet.

C is correct (the EXCEPT answer). This statement is FALSE. Limit orders do NOT guarantee execution regardless of how close the limit price is to the current market price. Even if the limit is within 1% of the market price, execution is not guaranteed. The order will only fill if and when the market actually trades at the limit price or better. There is no percentage threshold that guarantees execution.

A is accurate: limit orders allow investors to specify the maximum price they will pay (buy limit) or minimum price they will accept (sell limit), providing exact price control. B is accurate: this correctly describes the execution rules for both buy limits (limit or lower, meaning better for buyer) and sell limits (limit or higher, meaning better for seller). D is accurate: if market conditions never bring the security to the limit price, the order will remain unfilled indefinitely (or until canceled). This is the fundamental risk of limit orders in exchange for price control.

C is correct. Statements 2, 3, and 4 are accurate.

Statement 1 is FALSE: The order will NOT execute immediately at $50 because $50 is above the $48 limit price. Buy limit orders only execute at the limit price or LOWER, and $50 does not meet this condition. The order will remain pending until the stock falls to $48 or below.

Statement 2 is TRUE: The order will execute if XYZ trades at $47.50 because $47.50 is below the $48 limit price. Buy limit orders execute at the limit or lower (better for the buyer means lower prices), so $47.50, $47.00, or any price at or below $48 would trigger execution.

Statement 3 is TRUE: The limit order guarantees price control. If the order executes, the client will pay $48 or less per share, never more. This is the primary benefit of limit orders: controlling the maximum purchase price (for buy limits) or minimum sale price (for sell limits).

Statement 4 is TRUE: Since the stock is currently at $50 and the limit is $48, the order will only execute if the market falls by $2. If XYZ never reaches $48 or lower (for example, if it rises to $55 or stays at $50), the order will remain unfilled indefinitely. This is the risk of limit orders: no execution guarantee.