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Stocks Beginner: Buying and Selling Stock

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1.
An order that is effective until you decide to terminate it is called a limit order.
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False. This type of order is called a good til canceled order.
2.
By placing a _______ order on a stock, you can minimize the effects of a drop in stock price.
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Stop-loss. A stop-loss order instructs your broker to sell a stock if it falls below a certain price.
3.
A customer who wants nothing more than execution of trades from his or her broker will want a _______ broker.
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Deep-discount. The deep-discount broker limits his or her services to execution of trades.
4.
It is possible to buy stock shares without going through a broker.
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True. If you buy shares directly from the company or through a dividend reinvestment plan, you will not need a broker.
5.
A margin account allows you to borrow funds from your broker.
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True. Borrowing funds, or buying on margin, is possible only through a margin account.