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Question:

Moore Company stock is currently trading at $40 per share. An investor attempting to protect against losses of more than 10% on a short position in Moore should place a:

A stop buy order at $44.
Explaination

The investor is short the stock and will experience losses if the stock price increases. A stop buy order at $44 will execute if the stock price rises to $44 or higher. A limit buy order at $44 would execute immediately because the stock price is less than $44.