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Finra Series-7 Exam - Topic 6 Question 79 Discussion

Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points.Which of the following orders would be the best recommendation?
B) sell stop-limit order
A) sell limit order
C) sell stop order
D) buy stop order

Finra Series-7 Exam - Topic 6 Question 79 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 79
Topic #: 6
[All Series-7 Questions]

Bubba owns 100 shares of XYZ at $58. He needs to limit his loss to 5 points or less and will accept a longer time for the order to be executed, to make sure the loss does not exceed 5 points.

Which of the following orders would be the best recommendation?

Show Suggested Answer Hide Answer
Suggested Answer: B

balance sheet. This report reflects the entire condition of the company by showing all assets, liabilities, and components of net worth.


by Ernie at Dec 24, 2023, 09:46 PM

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Gwenn
9 months ago
Bubba's shares are at $58, needs to limit loss to $53.
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Elfrieda
9 months ago
Wait, can a stop order really protect against losses like that?
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Gracia
10 months ago
A sell limit order won't help here.
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Alexia
10 months ago
I disagree, B could work too.
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Anastacia
10 months ago
C is the best choice to limit losses.
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Sunny
10 months ago
I’m confused about the difference between a stop order and a stop-limit order. I hope I remember the right one for this scenario!
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Alberto
11 months ago
I practiced a similar question where a sell stop order was recommended to protect against losses. I feel like that could apply here too.
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Janine
11 months ago
I'm not entirely sure, but I remember something about stop-limit orders being tricky. They might not execute if the price drops too quickly.
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Lucy
11 months ago
I think a sell stop order might be the best choice here since it triggers when the price drops to a certain level, which helps limit losses.
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Laquanda
11 months ago
I'm leaning towards B as well, the sell stop-limit order. It gives Bubba the flexibility to manage his risk while still trying to get a decent price for the shares.
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Lemuel
11 months ago
Okay, I've got it. Since Bubba wants to limit his loss, the best option would be a sell stop-limit order. That way, he can set the stop price to $53 (58 - 5) and the limit price to ensure the order only executes at that price or better.
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Cruz
11 months ago
Hmm, I'm a bit confused here. Bubba owns 100 shares of XYZ, but the question doesn't specify whether he wants to buy or sell. I'll need to think this through carefully.
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Cheryl
11 months ago
This looks like a straightforward question on order types. I think the key is to focus on Bubba's requirement to limit his loss to 5 points or less.
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Fairy
11 months ago
I'm pretty confident the answer is B, sell stop-limit order. That allows Bubba to control the maximum loss while still getting the best possible price.
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Frederick
11 months ago
Ah, I think I've got it! The Verify Scope process would need the Project management plan as an input to confirm the approved scope. That's my best guess.
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Jaime
11 months ago
Okay, I think I've got this. The key is to focus on getting the requirements validated and approved by the customer before development starts. That's the most important first step.
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Gerry
1 year ago
Back in my day, we just used a good old-fashioned paper bag to limit our losses. These fancy trading orders are making my head spin!
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Monte
1 year ago
D) buy stop order
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Scot
1 year ago
C) sell stop order
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Lisbeth
1 year ago
B) sell stop-limit order
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Brittney
1 year ago
C) sell stop order
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Barrett
1 year ago
B) sell stop-limit order
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Erinn
1 year ago
A) sell limit order
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Ivan
1 year ago
A) sell limit order
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Christa
1 year ago
Hold up, why would anyone choose a buy stop order in this situation? That's just asking to lose more money than necessary.
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Pilar
1 year ago
I'm going with the sell limit order. That way, I can control the price at which my shares are sold, and still limit my loss to 5 points.
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Elise
1 year ago
I'm not sure, but I think a sell stop order could also work to limit the loss for Bubba.
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Ahmad
1 year ago
Hmm, a sell stop order seems like the way to go. It'll execute the trade as soon as the price hits my stop, which is exactly what I need to protect my investment.
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Kristeen
1 year ago
User 2: I agree, that way you can protect your investment and limit your loss to 5 points.
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Theodora
1 year ago
User 1: I think a sell stop order would be best. It will execute the trade as soon as the price hits your stop.
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Devorah
1 year ago
User 2: Yeah, that way you can protect your investment by executing the trade as soon as the price hits your stop.
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Leeann
1 year ago
User 1: I think a sell stop order would be the best choice.
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Lang
1 year ago
I agree with Tatum. A sell stop-limit order would help Bubba limit his loss to 5 points or less.
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Ronald
1 year ago
As a certified trader, I know that a sell stop-limit order would be the best choice here to limit my loss to 5 points or less.
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Tatum
1 year ago
I think the best recommendation would be a sell stop-limit order.
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Lauryn
1 year ago
I think a sell stop order could also work, as it would trigger a sale when the price reaches a certain point to limit the loss.
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Fernanda
1 year ago
I agree with Dana. A sell stop-limit order would help Bubba limit his loss to 5 points or less.
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Dana
1 year ago
I think the best recommendation would be a sell stop-limit order.
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