You own 100 shares of ASD that you purchased for $70 per share. The stock is currently selling for $110 a share and you place a Stop-Loss order at $88 per share.
a. If the stock price trades down gradually to $75 over the course of 2 months what is your return on your initial investment?
b. What would your return be if the stock “gapped down” overnight from $110 to $75 due to an accounting fraud allegation?