Question : Case Study 79
JKL Corporation is a company that has recently executed trades on a stock exchange. The company's management is reviewing the trading procedure.
Question :
In a market order, at what price are the shares bought or sold?
Option 1: A specific pre-set price
Option 2: The current market price
Option 3: A price higher than the market price
Option 4: A price lower than the market price
Correct Answer:
The current market price
Solution : The correct answer is (b) The current market price
In a market order, shares are bought or sold at the "current market price." A market order is an instruction to buy or sell a security at the best available price in the market at the time the order is placed. The execution of a market order is immediate, and the price at which the transaction occurs is determined by the prevailing market conditions, ensuring a quick trade but without a specified or pre-set price.
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