Canadian Securities Course (CSC) Level 1 Practice Exam

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What is a limit order?

An order with a set expiration date.
An order without a specified price limit.
An order to buy or sell at a specific price.
An order that can only be executed during specific trading hours.

The correct answer is: An order to buy or sell at a specific price.

A limit order is an order to buy or sell a security at a specified price or better. By setting a specific price, a limit order ensures that the trade will only be executed at that price or a more favorable one. This is different from a market order, where the trade is executed immediately at the current market price. Therefore, the correct choice is C. Option A is incorrect because a limit order does not have an expiration date. Option B is incorrect because a limit order does indeed have a specified price limit. Option D is incorrect because a limit order can be executed at any time when the market reaches the specified price.