An investor places a 'limit order' to buy a stock. What does this indicate?

Question: An investor places a 'limit order' to buy a stock. What does this indicate?

Answer options:

• The order will be executed immediately at the best available price. ✅ The order will be executed only at a specified price or better.
• The order will only be executed if the stock price reaches a certain level, triggering a market order.
• The order can only be placed during specific trading hours.

Correct answer: The order will be executed only at a specified price or better.

Explanation: A limit order specifies the maximum price the investor is willing to pay when buying or the minimum price they are willing to accept when selling, ensuring execution at that price or better.