SIE Knowledge of Capital Markets Question 5: Answer and Explanation

Question: 5

Which of the following is a function of the Options Clearing Corporation?

• A. Guaranteeing all listed stock option contracts in the United States
• B. Guaranteeing all options purchased through clearing brokers
• C. Guaranteeing the accounts of investors' holdings with bankrupt brokers
• D. Guaranteeing all futures contracts bought or sold through clearing brokers

Correct Answer: A

Explanation:

A: Guaranteeing all listed stock option contracts is a function of the OCC. Choices B and D are not functions of the OCC, although the OCC does guarantee listed stock options contracts in the United States, which are purchased through clearing brokers. Choice C is a function, on a limited basis, of the Securities Investors Protection Corporation.