Mock Exam Questions

Hi all,

I came across a few questions after writing a Kaplan mock and I’m not convinced the answers provided are correct. If anyone here can provide some insight that would be appreciated:

[questions and answers removed by admin]


Q1: Should be correct as stated by Schweser. Q2: Would have thought answer A to be correct. If a recall correctly a limit sell order is set above the curret price. Q3: Would heve gone with answer B as well. Agree that the answer of Schweser is somehow strange…

Regards, Oscar

Question 1 -

You’re right . CFAI provides totally opposite answer to almost exactly same question - If I were you, I would look it up in curriculum and follow their approach

Q2 explanation

Limit Sell orders are placed usually at the minimum price one wants to sell .

In other words:

1)If the market price is 6 and you want to sell at 9 , you can place a limit sell order for 9 $ - and your trade will execute only when the market will reach that price .

so the MINIMUM PRICE(not the MAXIMUM PRICE) in this case 9 is above the market price - \> a) is wrong and the MINIMUM PRICE which in this case is 9 is bigger then market price 6 $-> b) is also wrong

If the market price is 9 and you want to sell at a price cheaper than the market and place a limit sell order for 6 then your trade will execute immediately (who is stupid not to buy something cheaper :)? ) so technically you can place Limit Orders bellow, above and at market price -> C) is the correct Answer