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The stock of the Madison Travel Co. is selling for $56 per share. You put a limit buy order at $48 for one month. During the month, the stock price declines to $46, then jumps to $66, which is the month-end price.

a. Ignoring commissions, what would have been your rate of return on this investment?
b. What would be your rate of return if you had put in a market order?
c. What if your limit order was at $45?

 

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