You own 400 shares of Shamrock Enterprises that you bought at $18 a share. The stock...

You own 400 shares of Shamrock Enterprises that you bought at $18 a share. The stock is now selling for $32 a share. You put in a stop loss order at $28. If the stock eventually declines in price to $21 a share, what would be your rate of return with and without the stop loss order? Round your answers to two decimal places.

Rate of return with the stop loss in percent

Rate of return without the stop loss in percent

Solutions

Expert Solution

Rate of return with stop loss as stop loss would have got executed=[Stop loss price -buying price]/ Buying price

= (28-18)/18= 55.5555%

B. Rate of return without any kind of stop loss

= (Current selling price-buying price)/buying price

= (32-18)/18

=77.77%

jeff jeffy answered 1 year ago

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