False Statement Regarding Orders

One of the statements regarding orders is false. Let's review them:

• a. A limit-buy order provides the broker with the maximum price at which investors are willing to buy.
• b. A market buy order will purchase securities at the bid price.
• c. A limit-sell order is where investors specify prices at which they are willing to sell a security.
• d. If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if and when the share price falls below $45.
• e. A market order is simply an order to buy or sell a stock immediately at the prevailing market price.

The false statement is:

~~d. If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if and when the share price falls below $45.~~

The correct statement is:

d. If stock ABC is selling at $50, a limit-buy order may instruct the broker to buy the stock if and when the share price rises above $50.