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SIE EXAM – OPTIONS (QUESTIONS & ANSWERS 100% ACCURATE)
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An investor purchases 1 ABC Jan 45 Call @ $3. The investor subsequently exercises his option contract. The holder has the right to: A. buy stock at $45 per share B. buy stock at $48 per share C. sell stock at $45 per share D. sell stock at $48 per share - ANSWERA. buy stock at $45 per share...

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  • October 18, 2024
  • 15
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • sie exam options questions answers 100 accur
  • an investor purchases 1 abc jan 45 call 3 the

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SIE EXAM – OPTIONS (QUESTIONS &
ANSWERS 100% ACCURATE)

An investor purchases 1 ABC Jan 45 Call @ $3. The investor subsequently exercises his option
contract. The holder has the right to:



A. buy stock at $45 per share

B. buy stock at $48 per share

C. sell stock at $45 per share

D. sell stock at $48 per share - ANSWERA. buy stock at $45 per share



If the writer of an equity call contract is exercised, the writer must deliver: - ANSWERD. stock in 2
business days



A customer would buy put contracts because the customer: - ANSWERB. is bearish on the underlying
security



If the writer of an equity put contract is exercised, the writer must deliver:



A. cash in 1 business day

B. stock in 1 business day

C. cash in 2 business days

D. stock in 2 business day - ANSWERC. cash in 2 business days



The writer of a put on a listed stock is exercised. Upon assignment, the writer must:



A. pay the premium

B. deliver cash

C. buy stock

D. sell stock - ANSWERC. buy stock

, The "cost" of an option contract is the:



A. premium

B. exercise price

C. market price of the underlying security

D. intrinsic value - ANSWERA. premium



ABC Jan 50 call contracts are trading in the market at .65. What is the dollar price that a customer
would pay for 2 contracts at this price? - ANSWER$130.00



An option contract has intrinsic value if exercise is profitable to the: - ANSWERholder, ignoring the
premium paid



Which of the following contracts has the greatest intrinsic value?



A. ABC Jan 50 Call when the market price of ABC stock is $55

B. ABC Jan 50 Call when the market price of ABC stock is $50

C. ABC Jan 50 Put when the market price of ABC stock is $40

D. ABC Jan 50 Put when the market price of ABC stock is $60 - ANSWERC. ABC Jan 50 Put when the
market price of ABC stock is $40



A client buys an ABC Jul 50 Call @$2 when the stock is trading at $55. The contract: - ANSWERhas 5
points of intrinsic value



If the market price is above the strike price on a put contract, the difference is termed the: -
ANSWERout the money amount



Which options strategy provides the greatest profit potential in a bull market? - ANSWERLong Call



A customer buys 1 ABC Feb 60 Call @ $4 when the market price of ABC is 61. The stock moves to $75
and the customer exercises. The gain or loss to the customer is: - ANSWER$1,100 gain

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