Series 7 Exam Practice Test 8: Options

1. ABC Oct 70 puts are trading for 6 and ABC is currently trading at 74. What is the time value of the Oct 70 put options?

2. Which option is out of the money if ABC is trading at $60 per share?

3. AAD Aug 35 calls are trading for 4 when AAD is at 36. What is the time value of these options?

4. Which TWO of the following are bullish options strategies?

I. Buying calls

II. Buying puts

III. Writing calls

IV. Writing puts

5. Melissa R. purchased a JKL May 60 call for a premium of 5. What is the maximum potential gain?

6. Which of the following option positions is a long straddle?

7. Since Jim's index options are in the money, he would like to exercise them. Once exercised, Jim will receive

8. Declan wrote an XYZ August 30 call for 7. What is Declan's maximum potential gain?

9. Ayla K. purchased 1 VMO Feb 60 put for 7 and purchased 1 VMO Feb 55 call for 2. This strategy is a

10. If an investor believes the U.S. dollar will appreciate in relation to the Euro, which of the following option strategies should they choose?

11. An investor buys 1 TUV Aug 60 put for 7 and buys 1 TUV Aug 55 call for 2. What are the investor's break-even points?

12. Investors who own a long-straddle or long-combination position are hoping for the underlying stock to be

13. An investor buys 1 LMN May 80 call and sells 1 LMN Aug 80 call. This strategy is a

14. Place the following in order from first to last regarding the opening of an option account.

I. The customer signs and returns the OAA

II. A ROP approves the account

III. The customer receives an ODD

IV. The first trade is executed

15. Sharlene W. wishes to open an options account by purchasing 10 WXY 50 calls. Sharlene must sign an Options Account Agreement at what point?