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SIE Exam Lesson 14 Options pt 4
SIE Exam Lesson 14 Options pt 4
This is a SIE Exam Lesson 14 Options pt 4 options pt.1which is covering straddle options See how you do if you need help listen to the lesson over.
Questions covered include
1. It is a strategy of buying a put and a call with the same expiration date and the same strike price on the same company.
A. combination
B. protective put
C. spread
D. straddle
2. The last trading day of options is ___.
A. the date of the option’s expiration
B. the date of the option’s expiration minus two business days
C. the last business day of the expiration month
D. the last trade day before the expiration date
3. Options expire on ___.
A. the first Friday of the expiration month
B. the second Friday of the expiration month
C. the third Friday of the expiration month
D. the last Friday of the expiration month
4. It is a type of straddle wherein you sell the straddle.
A. butterfly straddle
B. condor straddle
C. long straddle
D. short straddle
5. The cost of a straddle is equal to ___.
A. the price determined by the seller of the straddle
B. the strike price divided by the beta
C. the sum of the intrinsic values of the call option and the put option
D. the sum of the premiums of the call option and the put option
6. The risk in a long straddle is ___.
A. the breakeven on the downside
B. the difference between the premiums of the call option and the put option
C. the premium of either the call option or the put option, whichever is higher
D. the total premium you paid for both of the options included in the straddle
7. The profit in a short straddle is ___.
A. limited to the downside by the total price of the stock minus the premium you collect
B. limited to the premium you collect
C. limited to the upside by the total price of the stock plus the premium you collect
D. unlimited to the movement of the price of the stock
8. The breakeven for a short straddle is the same as the breakeven for a long straddle.
A. True
B. False
9. In long straddles, the breakeven on the upside is where ___.
A. the new stock price rises above the initial stock price plus the premium of the call option
B. the new stock price rises above the initial stock price plus the total premium of the call and put option
C. the strike price rises above the initial stock price plus the premium of the call option
D. the price of the stock rises above the strike price enough to cover the premiums paid for the put and call options
10. In long straddles, the breakeven on the downside is where ___.
A. the new stock price falls below the initial stock price minus the premium of the put option
B. the new stock price rises above the initial stock price plus the total premium of the call and put option
C. the price of the stock falls below the strike price enough to cover the premiums paid for the put and call options
D. the strike price rises above the initial stock price plus the total premium of the call option and put option
11. In a long straddle, you make profit as long as the stock moved outside the breakeven on the upside and the breakeven on the downside.
A. True
B. False
12. In a short straddle, you lose money when the stock stays within the breakeven on the upside and the breakeven on the downside.
A. True
B. False
13. If you’re looking at buying a straddle, you’re looking for volatility; if you’re looking to sell a short straddle, you’re looking for stability.
A. True
B. False
14. In theory, a stock with a high beta should have lower option prices than a stock with a low beta.
A. True
B. False
15. A stock’s price is $35. The strike price is $30, the call premium is $5.50, and the put premium is $1. What is the breakeven on the upside?
A. $34.50
B. $36.50
C. $39.50
D. $40.50
16. A stock’s price is $80. The strike price is $78, the call premium is $5, and the put premium is $3. What is the breakeven on the downside?
A. $70
B. $72
C. $73
D. $77
17. A stock has a price of $65. The beta is 0.89. The strike price is $63. The call premium is $3 and the put premium is $2. Assuming the stock move with its beta, the market must go up
to ___ to breakeven on this option.
A. 3%
B. 3.37%
C. 4.62%
D. 5.19%
18. A stock has a price of $15. The beta is 1.7. The strike price is $14. The call premium is $2 and the put premium is $1.50. Assuming the stock moves with its beta, the market must go down to ___ to breakeven on this option.
A. 4.5%
B. 14.71%
C. 17.65%
D. 30%
19. You bought a long straddle. The stock price is $55 while the strike price is $53. The call premium is $4.75 while the put premium is $2. If the stock went up to $58, which of the following is true?
A. You would gain profit by collecting the premium.
B. You would gain profit by exercising your call option.
C. You would gain profit by exercising your put option.
D. You would not gain profit because the option is not above the breakeven point.
20. You sold a short straddle. The stock price is $16 while the strike price is $15. The call premium is $1.60 while the put premium is $1.50. If the stock went down to $10, what will be your gain/loss?
A. You would gain $3.10 from collecting the premium. The option would not be exercised because it is out of the money.
B. You would gain $5 by selling the stock.
C. You would lose $1.90 if the put option is exercised.
D. You would lose $5 if the put option is exercised.
We hope you did well on this SIE Exam Lesson 14 Options pt 3
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