2023 SIE Exam Lesson 15 Options pt 5 Quiz

SIE Exam: Securities Industry Essentials Exam Lessons and Information

SIE Exam Lesson 15 Options pt 5

SIE Exam Lesson 15 Options pt 5

This is a SIE Exam Lesson 15 Options pt 5 options pt.1 which is covering spread options, See how you do if you need help listen to the lesson over.

Questions covered include
1. It is the purchasing and selling of put or call options with different strike prices, different expiration dates, or both.
A. combination
B. spread
C. straddle
D. strangle

2. In a spread, when you close out one position, you are expected to close out the other position at the same time.
A. True
B. False

3. The longer the option, the higher the time value premium.
A. True
B. False

4. As an option approaches its expiration date, the time value on that option reaches its maximum value at the expiration of that option.
A. True
B. False

5. This spread is designed to try to capture the decline of an option’s time value as the option approaches its expiration date.
A. calendar spread
B. long call spread
C. long put spread
D. short call spread

6. Which of the following is bearish?
A. long call spread
B. short call spread
C. short put spread
D. all of the above

7. The maximum profit for a long call spread is the net cost of the spread.
A. True
B. False

8. A short call spread is a credit spread.
A. True
B. False

9. You bought Jan 80 call at $10 and sold Feb 80 call at $20. Stock trades at $100 at expiration. Feb 80 call has $5 time value left. Which is true?
(Note: This transaction is a calendar spread. The expiration mentioned is the expiration of the call option on January.)
A. You shall buy back the February 80 call at $5.

B. You shall buy back the February 80 call at $20.
C. You shall buy back the February 80 call at $25.
D. The February 80 call would expire worthless.

10. You bought Nov 30 call at $3 and sold Dec 30 call at $5. Stock trades at $25 at Nov expiration. Dec 30 call has $1 time value left. Which is true?
(Note: This transaction is a calendar spread.)
A. The November 30 call would expire worthless.
B. The December 30 call would expire worthless.
C. You would have a net profit of $2 by closing your position on the spread.
D. all of the above

11. You bought Mar 60 call at $5 and sold Apr 70 call at $3. This transaction is most probably a ___.
A. long call spread
B. long put spread
C. short call spread
D. short put spread

12. You initiated a long call spread by buying Sept 70 call at $10 and selling Oct 80 call at $5. What is your maximum profit in this transaction?
A. $5
B. $10
C. $15
D. The maximum profit cannot be determined because the stock price is not given.

13. You initiated a long call spread by buying May 100 call at $15 and selling June 85 call at $8. What is your maximum loss in this transaction?
A. $7
B. $8
C. $15
D. $23

14. If you enter into a long call spread, which of the following pair of transactions would give you the greatest possible profit?
A. buying a July 30 call at $5 and selling an August 50 call at $4
B. buying a July 25 call at $6 and selling an August 40 call at $5
C. buying a July 40 call at $9 and selling an August 60 call at $5
D. All of the above transactions have equal maximum profit

15. You initiated a short call spread by buying a Jan 40 call at $4 and selling a Feb 30 call at $7. What is your maximum profit in this transaction?
A. $3
B. $7
C. $11
D. The maximum profit cannot be determined because the stock price is not given.

16. If you enter into a short call spread, which of the following transactions would you pair with buying a Nov 65 call at $6 to have the greatest possible profit?
A. selling a December 60 call at $7 per share
B. selling a December 50 call at $8 per share

C. selling a December 40 call at $9 per share
D. The greatest possible profit would depend upon the highest price that the stock could get.

17. You entered into a long put spread by buying Aug 95 put at $15 and selling Sept 75 put at $9. Which of the following is true?
A. A stock price of $100 at August expiration would give you the greatest profit.
B. A stock price of $85 at August expiration would give you the greatest profit.
C. A stock price of $80 at August expiration would give you the greatest profit.
D. A stock price of $70 at August expiration would give you the greatest profit.

18. In a long put spread, you bought Apr 55 put at $6 and sold May 35 put at $3. If the stock trades at $60 at April expiration, which is true?
A. The April 55 put would expire worthless.
B. The May 35 put would have an intrinsic value of $25.
C. You would lose $5 at April expiration.
D. You would profit $3 at April expiration.

19. What’s your initial credit if you bought Oct 80 put at $9 and Nov 90 put at $13 both for a stock initially trading at $85?
A. -$4
B. $4
C. $5
D. $8

20. In a short put spread, you bought June 60 put at $8 and sold July 75 put at $10. The stock trades at $70 at June expiration. Your net profit is:
A. You would have a $2 net profit.
B. You would have a $3 net profit.
C. You would have a $5 net profit.
D. You wouldn’t have a profit but instead a loss of $3.

We hope you did well on this SIE Exam Lesson 15 Options pt 5

Total Course 37 hours 10 Min

37 hours 10 Min of audio instruction to help you prepare for the Securities Industry Essentials Exam

59 Audio Lessons for Securities Industry Essentials Exam

13 Bonus Lessons about the finance industry

Securities Industry Essentials Exam Podcast Audio Lessons for the SIE Exam

The full course details:
37 hours 10 Min of audio instruction to help you prepare for the Securities Industry Essentials Exam

59 Audio Lessons for Securities Industry Essentials Exam

13 Bonus Lessons about the finance industry

Securities Industry Essentials Exam Podcast Audio Lessons for the SIE Exam

New Series 7 Exam and SIE Exam details.

All candidates now must now pass both the SIE exam (securities industry essentials exam) as well as the New Top-Off Series 7 Exam. A Series 7 candidate must also have an industry sponsor in order to take the examination to take the SIE Exam the candidate simply needs to be 18 years old and no broker affiliation is needed..
https://www.finra.org/industry/essentials-exam

• “Securities Industry Essentials (SIE) Exam
  Available Beginning October 1, 2018
  The Securities Industry Essentials (SIE or Essentials) Exam, available beginning October 1, 2018, is a new FINRA exam for prospective securities industry professionals. This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices.
  Key Features of the Essentials Exam
  ________________________________________
  • The Essentials exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers.
  • Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.
  • Essentials exam results are valid for four years.
  The Essentials Exam at a Glance
  ________________________________________
  Number of Items 75
  Format Multiple Choice
  Duration 105 minutes
  Passing Score 70%
  Cost $60”

New Series 7 Exam

The New Series 7 Content Outline provides a comprehensive guide to the range of topics covered on the exam, as well as the depth of knowledge required. The outline is comprised of the four main job functions of a general securities representative. The table below lists the allocation of exam questions for each main job function.
Major Job Functions Percentage of Test Questions Number of Test Questions
(F1) Seeks Business for the Broker-Dealer from Customers and Potential Customers 7% 9
(F2) Opens Accounts after Obtaining and Evaluating Customers’ Financial Profile and Investment Objectives 9% 11
(F3) Provides Customers with Information about Investments, Makes Suitable Recommendations, Transfers Assets and Maintains Appropriate Records 73% 91
(F4) Obtains and Verifies Customers’ Purchase and Sales Instructions and Agreements; Processes, Completes, and Confirms Transactions 11% 14
TOTAL 100% 125”

The five job functions of the new Series 7 General Securities Representative Exam will be:

“Seeks business for the broker-dealer through customers and potential customers”

“Evaluates customers’ financial status, financial needs and risk tolerance, and helps them identify their investment objectives”

“Opens accounts, transfers assets and maintains appropriate account records”

“Provides customers with information on investments and makes suitable recommendations”

“Obtains and verifies customer’s purchase and sales instructions, enters orders and follows up”

These five functions of the new series 7 exam are the same or substantially similar to ones on the current Series 7 exam. A notable change from the existing Series 7 exam is the addition of evaluating customer “risk tolerance.”

https://www.finra.org/industry/series7

Here is a link to the table of Contents

Here is what my customers say about my audio lessons
Testimonials

—————————

New Series 7 Exam and SIE Exam details.

FINRA has announced major changes to the Series 7 Exam effective October 1, 2018. With the introduction of the Securities Industries Essentials Exam (SIE Exam) the new series 7 has been pared down to 125 questions from its original 250 questions.

https://www.finra.org/industry/series7

However there is now a prerequisite before taking the new Series 7 Exam all candidates now must have passed the SIE exam (securities industry essentials exam). In addition thing a series 7 candidate must also have an industry sponsor in order to take the examination.
https://www.finra.org/industry/essentials-exam

“Securities Industry Essentials (SIE) Exam
Available Beginning October 1, 2018
The Securities Industry Essentials (SIE or Essentials) Exam, available beginning October 1, 2018, is a new FINRA exam for prospective securities industry professionals. This introductory-level exam assesses a candidate’s knowledge of basic securities industry information including concepts fundamental to working in the industry, such as types of products and their risks; the structure of the securities industry markets, regulatory agencies and their functions; and prohibited practices.
Key Features of the Essentials Exam
________________________________________
• The Essentials exam is open to anyone aged 18 or older, including students and prospective candidates interested in demonstrating basic industry knowledge to potential employers.
• Association with a firm is not required, and individuals are permitted to take the exam before or after associating with a firm.
• Essentials exam results are valid for four years.
The Essentials Exam at a Glance
________________________________________
Number of Items 75
Format Multiple Choice
Duration 105 minutes
Passing Score 70%
Cost $60”

Outline of SIE Exam:
https://www.finra.org/sites/default/files/SIE%20Outline-01.12.18.pdf

https://www.finra.org/industry/series7

https://www.finra.org/sites/default/files/Series_7_Content_Outline.pdf

Here is what my customers say about my audio lessons
Testimonials

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