Series 65 Exam Lesson 35 Quiz options pt. 2

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 35 Quiz options pt. 2

Series 65 Exam Lesson 35 Quiz options pt. 2 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 35 Quiz options pt. 2

Below are questions based on Lesson 35. Choose the letter of the correct answer.

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

Series 65 Exam Lesson 35 Options pt 2 Cont:

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.

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 an...