Series 65 Exam Lesson 36 Quiz options pt. 3
This is a Series 65 Exam Lesson 34 Options pt 1: a free quiz for Series 65 Exam Lesson 34 Quiz which is covering Options part 1 . Try it and see how you do if you need help listen the lesson over.
Series 65 Exam Lesson 36 Quiz options pt. 3
Series 65 Exam Lesson 36 Quiz options pt. 3 covering more option strategies you need to understand for the Series 7 Exam
Below are questions based on the lesson 35 of the series. Choose the letter of the correct answer.
Series 65 Exam Lesson 36 Quiz options pt. 3
1. It refers to the number of options that are currently trading in the market.
A. breakeven point
B. open interest
C. utility
D. volatility
2. The following increases open interest EXCEPT:
A. buying to close
B. buying to open
C. selling to open
D. All of the above increase open interest.
3. If you bought an option and you want to sell it, the market price of the option would be ___.
A. the option’s time value at expiration date
B. the option’s intrinsic value at expiration date
C. the option’s intrinsic value when you bought the option
D. the option’s premium
4. Which of the following factors least affect the premium of an option?
A. dividend
B. interest rate
C. option time period
D. volatility
5. If you want to short a stock and interest rates are high, you have to pay higher margin interest rates.
A. True
B. False
6. Utility stocks used to be referred to as ___.
A. county stocks
B. growth stocks
C. value stocks
D. widow-and-orphan stocks
7. Why do utility stocks often have low premium options?
A. Utility stocks often have high income.
B. Utility stocks often have high volatility.
C. Utility stocks often have low income.
D. Utility stocks often have low volatility.
8. It is the measure of a stock’s volatility in relation to the market.
A. beta
B. theta
C. vega
D. veta
9. Which of the following is NOT true about beta?
A. A beta lower than one means that the stock moves more than the market does in general.
B. A beta of one correlates equally with the market.
C. High beta stocks will have higher option premiums.
D. High dividend stocks have a lower beta.
10. If you short a stock and the stock pays a dividend, you are required to pay the dividend when that dividend comes do.
A. True
B. False
11. Compared to call premiums, put premiums are lower on a high dividend stock.
A. True
B. False
12. Which of the following would yield a low option premium?
A. An option with a high dividend on the stock.
B. An option with a high volatility.
C. An option with a long time period before expiration.
D. all of the above
13. If you think the stock would go up, which is the best option strategy to take?
A. Buy a long call option.
B. Buy a long put option.
C. Write a covered call.
D. Write a naked call.
14. Why is it wise to write a covered call when the stock would go down?
A. so that the call option would not be exercised and you can keep the premium
B. so that you can buy the stock at a lower strike price
C. so that you can profit by selling the stock at a higher price
D. all of the above
15. If you long a call, that gives you the right to buy the stock at a specific strike price.
A. True
B. False
16. If you short a put, you are obligated to deliver the stock if it is called away from you.
A. True
B. False
17. A stock is selling at $50. A call option on that stock has a strike price of $70. The premium is $5. What is the breakeven for this option?
A. $45
B. $55
C. $65
D. $75
18. You wrote a covered call for a stock. The stock price is $30. The stock’s premium is $10 and the strike price is $25. If the stock goes down to $20, which is unlikely to happen?
A. The option holder would exercise his option.
B. The option would expire worthless.
C. You would breakeven at the time the stock goes down to $20.
D. You would earn profit by collecting the premium.
19. You wrote a covered call with a premium of $20 for a stock trading at $100. The strike price was $100. If the stock went up to $150, which is true?
A. The option would expire worthless.
B. You could buy back the option at the market before it expires.
C. You would have the obligation to buy the stock if the option is exercised.
D. You could exercise your right to sell the stock at the strike price.
20. You wrote a put with a premium of $5 on a stock selling at $40. The strike price was $40. If the stock went down to $30, what would happen?
A. The option would expire worthless.
B. You gain no profit and lose $10 per share if the option was exercised.
C. You gain no profit and lose $5 per share if the option was exercised.
D. Your maximum profit would be $5 if the option was exercised.
Series 65 vs Series 66 Exam
The Series 65 exam is designed for those who do not have a Series 7 license. The content of both exams are similar though the Series 65 will be more heavily concentrated on Investment products and economics (like you would need to learn for the SIE and Series 7 Exam). … The Series 66 exam has a little more State law (such as what you will find in the Series 63 Exam) and some esoteric investment products.
Our audio lessons for both the Series 65 and Series 66 cover the material you would need to learn for the SIE and Series 7 exam so it may be a little more than you need for the Series 66 but we want you to be fully prepared!
The only difference between the two series of exam lessons (the 65 and 66) is that the Series 66 exam also covers the material needed for the Series 63 exam.
Our other website s for FINRA and other certification Exams include:
https://www.series7podcast.com
https://www.series7podcast.com
https://insuranceexampodcast.com
https://insuranceexampodcast.com
https://www.reexampodcast.com/
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