Question 13—The 2% Rule
A beginning trader with a $20,000 account decides to implement the 2% Rule of money management. He finds a stock quoted at $12.50 and decides to buy it, with a price target of $15 and a stop-loss order at $11.50. The maximum number of shares this Rule allows him to buy is close to:
1. 900
2. 400
3. 350
4. 200
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