Podcast: Play in new window | Download (Duration: 9:54 — 4.0MB)
Subscribe: Apple Podcasts | RSS | Subscribe to Podcast
SIE Exam Lesson 12 Options pt 2
SIE Exam Lesson 12 Options pt 2
This is a SIE Exam Lesson 12 Options pt 2 options pt.1which is covering options pt. 1 basic option terminology of call and put options See how you do if you need help listen to the lesson over.
Questions covered include
Below are questions based on the previous lesson. Choose the letter of the correct answer.
To take the quiz online, click here.
Quiz Options Part 2
Below are questions based on the previous lesson. Choose the letter of the correct answer.
To take the quiz online, click here.
1. It is the cost of an option.
A. bid price
B. ask price
C. premium
D. strike price
2. The premium contains the option’s ___.
A. intrinsic value
B. time value
C. both intrinsic value and time value
D. neither intrinsic value nor time value
3. This refers to the number of options that are open for trading in the market.
A. bid
B. volatility
C. open interest
D. volume
4. This refers to the number of options that were sold or traded for the given day.
A. bid
B. volatility
C. open interest
D. volume
5. It refers to the amount of uncertainty or risk about the size of changes in a security’s value.
A. open interest
B. premium
C. volatility
D. volume
6. Parity is when the strike price and the stock are selling at exactly the same price.
A. True
B. False
7. An option is created by writing covered calls.
A. True
B. False
8. Writing a covered call ___.
A. decreases open interest
B. decreases volume
C. increases open interest
D. increases volume
9. If a person wrote an option (such as a covered call) and is now buying back the option, he is opening a position.
A. True
B. False
10. Person A writes a covered call option and Person B buys that option. Which of the following is true?
A. Person A sells to close and Person B buys to close.
B. Person A sells to close and Person B buys to open.
C. Person A sells to open and Person B buys to close.
D. Person A sells to open and Person B buys to open.
SIE Exam Lesson 12 Options pt 2 Cont:
11. This is used in determining the theoretical value of an option.
A. Black-Scholes model
B. Fed model
C. Sharpe ratio
D. Sortino ratio
12. It serves as an insurance to your investment portfolio.
A. covered call
B. married put
C. naked call
D. put on a put
13. An option without intrinsic value always has no time value.
A. True
B. False
14. A naked put is written by a person who owns the stock.
A. True
B. False
15. A call option is offered on a stock. If the current price of the stock is $20 and the strike price is $15, what is the intrinsic value of the option?
A. $2.5
B. $5
C. $10
D. There is no intrinsic value in this option.
16. A call option is offered on a stock. If the current price of the stock is $12 and the strike price is $10, what is the premium of the option?
A. $1
B. $2
C. $11
D. The premium of the option cannot be computed from the given facts.
17. A call option is offered on a stock. The current price of the stock is $20 and the strike price is $15. The call option’s premium is $8. What is the time value of the option?
A. $2
B. $3
C. $4
D. There is no time value for this option.
18. An option is selling at $6 per share and the option is for 10 shares. If you bought the option for a bid price of $5.50 per share, how much will you pay for the option for 10 shares?
A. $5.50
B. $6
C. $55
D. $60
19. If the stock is currently selling at $30 a share and you write a covered call for $40 a share, there is ___.
A. $10 in the money option
B. $10 out of the money option
C. $30 in the money option
D. $40 out of the money option
20. You bought a married put with a strike price of $15. If the current price of the stock is $20, what is the intrinsic value of the option?
A. $2.5
B. $5
C. $10
D. There is no intrinsic value in this option.
We hope you did well on this SIE Exam Lesson 12 Options pt 2
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