SIE EXAM – OPTIONS (QUESTIONS & ANSWERS 100% ACCURATE)
9 views 0 purchase
Course
SIE - OPTIONS
Institution
SIE - OPTIONS
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...
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
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller papersmaster01. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
