Investment Analysis for purchase of stock
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The stock of the Madison Travel Co. is selling for $56 per share. You put a limit buy order at $48 for one month. During the month, the stock price declines to $46, then jumps to $66, which is the month-end price.
a. Ignoring commissions, what would have been your rate of return on this investment?
b. What would be your rate of return if you had put in a market order?
c. What if your limit order was at $45?
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Solution Summary
Investment Analysis for purchase of stock of Madison Travel Co using a limit buy order
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a. Since your limit order for at $48, while the share is dropping from 56 to 46, your order will activate when the share price is 48. Then share ...
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