Question

in the context of buying securities, which of the following statements is true of a buy limit order?
a. it tells a broker to buy a stock only if its price is at or below a specified value.
b. it instructs a broker to buy a stock just before it becomes undervalued in the market.
c. it instructs a broker to buy a security at the current market price.
d. it tells a broker to buy and sell a security only when its price has been constant for a given period of time.

Explanation:

A buy limit order is an order to purchase a security at or below a specified price. This allows the investor to control the maximum price they are willing to pay. Option b is incorrect as there is no such instruction in a buy limit order. Option c describes a market order. Option d is not a characteristic of a buy limit order.

Answer:

A. It tells a broker to buy a stock only if its price is at or below a specified value.