What would be your rate of return with and without stop loss


Problem

You own 200 shares of Shamrock Enterprises that you bought at $25 a share. The stock is now selling for $45 a share.

1) You put in a stop-loss order at $40. Discuss your reasoning for this action.

2) If the stock eventually declines in price to $30 a share, what would be your rate of return with and without the stop loss order (ignore commissions)?

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