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Series 65 Podcast Interview with Whistleblower Attorney Mark Pugsley

This is an interview with Whistleblower Attorney Mark Pugsley while this is not information that is required for the Series 7 Exam I think you will be a more knowledgeable advisor if you are aware of the information contained in this interview.

Mark Pugsley is quite famous for his part in bringing down Milton Trevor of Nikola corporation.  He was featured prominently in the podcast BAD BETS

This is information about Mark Pugsley from his website

“Mark Pugsley has been handling securities disputes, financial fraud and whistleblower cases for 28 years. His whistleblower practice includes preparing and filing whistleblower tips with the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC) and the Internal Revenue Service (IRS), he also handles False Claims Act or “Qui Tam” lawsuits, FINRA arbitrations and other types of investment disputes.

Mark is based in our Utah office, the state which boasts the largest number of Ponzi schemes per capita in the country. He has been recognized by Super Lawyers, Best Lawyers, Benchmark Plaintiffs, and Martindale Hubbell as one of the top securities lawyers in the country. He is licensed to practice law in Utah and California.

Mark represents whistleblowers in a number of high-profile ongoing cases, including the whistleblowers in the Washakie Renewable Energy scam in which executives pleaded guilty to criminal charges in a $1 billion biodiesel tax fraud scheme.  He also represents the whistleblowers in the Nikola Motors case who uncovered widespread fraud by the CEO, Trevor Milton.  The whistleblower report to the SEC in the Nikola case led to a $125 million settlement by the company with the SEC, and Mr. Milton was charged civilly and criminally with securities fraud, among other charges. Another of his whistleblower clients uncovered an ongoing $200 million Ponzi scheme that led to civil and criminal actions by the DOJ, SEC and State regulators.  These cases are ongoing.

Significant recoveries for his whistleblower, investment fraud and FINRA Arbitration clients include the following:

* Representation of two whistleblowers in an SEC whistleblower case that was approved for an award in April of 2021. His clients were awarded 30% of the $9,384,253 in ordered fines and penalties – the maximum award possible.

* Represented the Declarant in a whistleblower case filed against Vivint Smart Home Inc.. On January 6, 2021 the Justice Department announced that Vivint had agreed to pay the United States $3.2 million to resolve the case. His client will receive a significant reward.

* Represented a client in an $11 million CFTC whistleblower case that was approved for an award in January of 2020. His client will receive a significant portion of all restitution and civil penalties collected by the CFTC.

* Representation of three clients in a 5-day trial in Utah State Court where his clients were awarded compensatory damages in excess of $3 million, $2 million in punitive damages, and attorney’s fees.

* Represented a bankruptcy trustee and trustee of a private actions trust pursuing the claims of over 400 victims of a Ponzi scheme against a national life insurance company for securities fraud and the negligent employment of the agents who perpetrated the scheme for over a decade. The parties reached an 8-figure settlement in 2018.

* Represented 15 clients in a FINRA arbitration case alleging more than $6 million in out of pocket damages involving a rogue broker from a national brokerage firm. The firm settled the case shortly before the arbitration hearing in August ...

Series 65 Exam Lesson 56 Securities Act of 1933 Quiz

This is a Series 65 Exam Lesson 56 Securities Act of 1933 Quiz: a free quiz for Series 65 Exam Lesson 56 Securities Act of 1933 Quiz. Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 56 Securities Act of 1933 Quiz

Series 65 Exam Lesson 56 Securities Act of 1933 Quiz  is covering the Annuities information you need to understand for the Series 65 Exam

Below are questions based on Series 65 Exam Lesson 56 Securities Act of 1933 lesson of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 56 Securities Act of 1933 Quiz

1. Which of the following is true about the Securities Exchange Act of 1934?

(Select all that apply.)

A. It applies to exempt securities.

B. It determines what fair trading practices are.

C. It regulates the secondary trading of securities.

D. It was established by the Securities and Exchange Commission.

2. Which of the following is contained in a 10-K? (Select all that apply.)

A. balance sheet

B. cash flow statement

C. compensation of officers

D. income statement

3. The 10-Q is an audited financial report submitted quarterly to the Securities and Exchange Commission.

A. True

B. False

4. A ___ is filed if the company changes its name or there’s a 5% or greater change in the number of shares outstanding.

A. 10-C

B. 13-G

C. 15-B

D. 8-K

5. Which of the following is required from the broker-dealers by the Securities Exchange Act of 1934?

(Select all that apply.)

A. buy back stocks for customers that reneged on their transactions

B. electronically deliver clients’ confirmation and statements

C. maintain a minimum net capital

D. send customers a copy of their income statement

6. Under ___, margins are regulated from brokers to their customers.

A. Regulation D

B. Regulation M

C. Regulation T

D. Regulation U

7. Broker-dealers are allowed to disclose to customers the routing of the customers’ orders.

A. True

B. False

8. It is a totally anonymous matching of buy and sell orders.

A. alternative trading system

B. electronic exchange

C. electronics communication network

D. physical exchange

9. Which of the following are/were physical exchanges?

(Select all that apply.)

A. Cincinnati Stock Exchange

B. New York Stock Exchange (NYSE)

C. Pacific Stock Exchange

D. Philadelphia Stock Exchange

10. Which of the following is true about penny stocks?

(Select all that apply.)

A. They are sold on the over-the-counter bulletin board.

B. They are unsolicited orders.

C. They are traded on the NASDAQ and other listed exchanges.

D. They sell at less than $5.

11. The broker is not required to assess a penny stock buyer’s financial situation if the buyer is a/an ___.

(Select all that apply.)

A. accredited investor

B. client whose order is unsolicited

C. insider

D. interstate citizen

12. It is trading on nonpublic material information on the company.

A. front running

B. insider trading

C. pegging

D. wash trade

13. This is the catchall rule that prohibits anything fraud even if it is not specifically prohibited in the Securities Exchange Act of 1934.

A. Rule 10b-5

B. Rule 127-c

C. Rule 144A

D. Rule 145

14. For unlawful practices under the Securities Exchange Act of 1934, suits can be brought within ___ of discovery.

A. six months

B. one year

C. two years

D. three years

15. If a control person owns a position of a stock and he wants to lock in his profit or loss, he can ___.

A. dribble out

B. peg the stock

C. short against the box

D.

Series 65 Exam Lesson 29 Annuities Quiz

This is a Series 65 Exam Lesson 29 Annuities Quiz: a free quiz for Series 65 Exam Lesson 29 Annuities Quiz which is covering the unit investment trust . Try it and see how you do if you need help listen the lesson over.

Series Series 65 Exam Lesson 29 Annuities Quiz

Series 65 Exam Lesson 29 Annuities Quiz  is covering the Annuities information you need to understand for the Series 65 Exam

Below are questions based on Series 65 Exam Lesson 29 Annuities lesson of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 29 Annuities Quiz

1. It is a contract wherein the buyer make payments and after some time, the insurance company will make a series of payments back to the buyer.

A. annuity contract

B. bond contract

C. option contract

D. variable contract

2. Which of the following is NOT true regarding the selling of an annuity contract?

A. The seller of an annuity contract has to have an insurance license.

B. The insurance license for selling an annuity contract is regulated at the national level.

C. The insurance license for selling an annuity contract is issued by the state.

D. All of the above are true regarding the selling of an annuity contract.

3. The earnings on the accumulated funds in an annuity grow tax-deferred.

A. True

B. False

4. Annuity contracts are sold by investment advisors.

A. True

B. False

5. Insurance company accounting is quite different from generally accepted accounting principles.

A. True

B. False

6. Which is the correct formula for a combined ratio?

A. (earned premiums – insured losses) ÷ expense of the company

B. (insured losses + expense of the company) ÷ earned premiums

C. earned premiums ÷ (insured losses + expense of the company)

D. expense of the company ÷ (earned premiums – insured losses)

7. An insurance company had an insurance losses of $10 million, expenses of $3.5 million, and an earned premium of $9 million. What is the combined ratio?

A. 29%

B. 67%

C. 150%

D. 350%

8. An insurance company is paying out more money than it earns when the combined ratio is ___.

A. a negative percentage

B. above 100%

C. below 100%

D. equal to 100%

9. Which of the following is true about a long tail business?

A. It happens when insurance premiums are collected over the years while it takes a long time before a claim arrives (e.g. medical malpractice insurance).

B. It happens when the combined ratio is greater than 100%.

C. It happens when the interest rates are low causing a higher investment income.

D. It happens when there is an investment profit that is not calculated in the combined ratio.

10. In a variable annuity, the insurance company guarantees the annuitant a specific rate of return on his investment over a certain period of time.

A. True

B. False

11. In a fixed annuity, if interest rates are low, the offer of the insurance company would be ___.

A. high

B. low

C. fixed regardless of the interest rates

D. The offer of the insurance company may vary but is independent from the interest rate.

12. In calculating how much a life annuity is going to pay an annuitant, an insurance company takes into consideration the annuitant’s ___.

(Select all that apply.)

A. age

B. financial status

C. gender

D. health

13. It is an annuity wherein a beneficiary could still receive the monthly payments even if the owner of the annuity has already died.

A. joint and last survivor annuity

B. life annuity

C. life annuity with a period certain

D. unit refund life annuity

14. Which of the following is true about joint and last survivor annuity? (Select all that apply.)

A.

Series 65 Exam Lesson 28 Unit Investment Trust

This is a Series 65 Exam Lesson 28 Unit Investment Trust: a free quiz for Series 65 Exam Lesson 28 Unit Investment Trust which is covering the unit investment trust . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 28 Unit Investment Trust Quiz

Series 65 Exam Lesson 28 Unit Investment Trust Quiz  is covering the Unit Investment Trust information you need to understand for the Series 65 Exam

Below are questions based on Series 65 Exam Lesson 28 Unit Investment Trust  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 28 Unit Investment Trust Quiz

1. It is a specific portfolio of bonds that is self-liquidating.

A. unit investment trust

B. open-end mutual fund

C. closed-end mutual fund

D. hedge fund

2. The unit investment trust is regulated by the Investment Company Act of 1940.

A. True

B. False

3. What is the implication of a unit investment trust being self-liquidating?

A. The investor will get back over time the principal plus interest.

B. The net asset value of the trust is independent from the market value.

C. The trust is free from ownership risk.

D. There is a constant interest rate until the trust’s maturity.

4. Which of the following is true about a unit investment trust which invests in fixed income investments?

(Select all that apply.)

A. Buying the trust is buying shares of beneficial interest.

B. Holding the unit investment trust to its maturity returns the investment (assuming no defaults).

C. If the trust is sold prior to maturity, it has more interest rate risk than other fixed income portfolio.

D. Unlike a bond, this trust is a fixed portfolio.

5. A fixed income unit investment trust differs from an open-end mutual fund in such a way that ___.

(Select all that apply.)

A. A fixed income unit investment trust is self-liquidating; an open-end mutual fund is not.

B. An open-end mutual fund has breakpoints; a fixed income unit investment trust has none.

C. An open-end mutual fund is perpetual; a fixed income unit investment trust is not.

D. An open-end mutual fund pays a little, if any, management fee; a fixed income unit investment trust pays very high management fees.

6. A unit investment trust does not expand nor contract in size once issued.

A. True

B. False

7. Unit investment trusts can invest in ___.

(Select all that apply.)

A. closed-end funds

B. corporate bonds

C. government securities

D. equities

8. The shares of beneficial interest in a unit investment trust can be redeemed prior to maturity.

A. True

B. False

9. A unit investment trust that invests in a master limited partnership will receive a ___ at the end of the year.

A. 1099-DIV

B. 1601F

C. CF-213

D. K-1

10. A trust invests in a closed-end fund. The fund’s net asset value is $28.74. It currently trades at $29.03. What is the percentage of the premium?

A. 0.01%

B. 0.09%

C. 0.99%

D. 1%

11. It is a unit investment trust used to fund variable annuities.

A. fixed income unit investment trust

B. municipal bond unit investment trust

C. participating unit investment trust

D. stock unit investment trust

12. In a fixed income unit investment trust, if any of the bonds in the fund default, the principal that the investor would be getting back would ___.

A. increase

B. decrease

C. remain the same

D. be equal to the market value

13. A unit investment trust that invests in US government bonds that is held in maturity is NOT subject to ___.

A. credit worthiness risk

B. currency risk

C. interest rate risk

D. principal risk

14.

Series 65 Exam Quiz Mutual Funds 3

This is a Series 65 Exam Lesson 26 Quiz Mutual Funds pt. 3: a free quiz for Series 65 Exam Quiz Mutual Funds 3 which is covering mutual funds pt 3 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2

Series 65 Exam Lesson 26 Quiz Mutual Funds pt. 3 covering more fundamentals of mutual funds you need to understand for the Series 65 Exam

Below are questions based on the lesson 26  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 26 Quiz Mutual Funds pt. 3

1. Which of the following is true about hedge funds?

(Select all that apply.)

A. They are not allowed to cut off withdrawals by their investors.

B. They are open to any kind of investor.

C. They charge a management fee.

D. They have a cap on the amount that is available to be withdrawn at any given time.

2. What is the minimum capital for a hedge fund?

A. $100,000

B. $200,000

C. $500,000

D. $1,000,000

3. Which of the following is qualified as an accredited investor according to the Securities Act of 1933?

(Select all that apply.)

A. a bank

B. a charitable organization with a total asset of $5 million

C. a trust with a total asset of $10 million

D. an employee benefit plan that has a total asset of $3 million

4. A business is qualified to be an accredited investor if all its equity owners are accredited investors.

A. True

B. False

5. A natural person can be an accredited investor if that person ___.

(Select all that apply.)

A. has an income exceeding $200,000 in each of the two most recent years and a reasonable expectation of the same income level in the current year

B. has individual net worth that exceeds $1 million including the value of the primary residence of such person

C. has a joint income with the spouse exceeding $200,000 in each of the two most recent years and a reasonable expectation of the same income in the current year

D. has a joint net worth with the person’s spouse that exceeds $1 million excluding the value of the primary residence of such person

6. The performance of a hedge fund is always better than the market.

A. True

B. False

7. Which of the following strategies does a hedge fund employ?

(Select all that apply.)

A. global macro hedge fund strategy

B. relative value arbitrage

C. high-frequency trading

D. currency strategies

8. A mutual fund’s annual and semiannual report has an income statement similar to a regular corporate income statement.

A. True

B. False

9. Which of the following can be found in a mutual fund’s income statement?

(Select all that apply.)

A. dividends

B. capital gains

C. expenses

D. net income

10. Which of the following is true about expense ratio?

(Select all that apply.)

A. It applies to closed-end funds but not to open-end funds.

B. It gives an overall look at how much it costs to pay the management to buy the stocks instead of buying it yourself without paying any management fee.

C. It is the total net assets divided by the total expenses.

D. It shows the efficiency of the fund.

11. If you’re buying a fund at a very big discount but has a very high expense ratio, the discount you’re buying those stocks may disappear.

A. True

B. False

12. An investment company should distribute at least ___ of its income in order to be regulated under the Investment Company Act of 1940.

A. 80%

B. 85%

C. 90%

D. 95%

13. If an investment company is not regulated under the Investment Company Act of 1940, ___.

A. it becomes taxed as a regular corporation

B. it has to pay an additional tax equivalent to 2% of the total capital gains

Series 65 Exam Quiz Mutual Funds 2

This is a Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2: a free quiz for Series 65 Exam Quiz Mutual Funds 2 which is covering mutual funds pt 2 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2 covering more fundamentals of mutual funds you need to understand for the Series 65 Exam

Below are questions based on the lesson 25  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 25 Quiz Mutual Funds pt. 2

1. Which of the following is true about closed-end funds?

(Select all that apply.)

A. It can trade at a premium or at discount to net asset value.

B. It is redeemed.

C. It has a fixed maturity and interest rate.

D. It trades as a common stock on the exchanges wherever it is listed.

2. Which of the following details can be found on the website of the company that sponsors a closed-end fund?

(Select all that apply.)

A. discount to net asset value

B. net asset value

C. premium

D. price of the stock

3. It is the amount annually collected from the shareholders, which include all the operating cost of the fund.

A. conversion ratio

B. expense ratio

C. liquidity ratio

D. Sharpe ratio

4. If a closed-end fund has a very high expense ratio, one reason you might wish to buy the fund is because ___.

A. it is sold at net asset value

B. it is sold at net asset value less than the expense ratio

C. it is sold at par value

D. it is sold at a big discount to net asset value

5. In financial industry, “Red Herring” refers to ___.

A. expense ratio

B. hedge funds

C. master limited partnerships

D. preliminary prospectus

6. Which of the following is true about a preliminary prospectus?

(Select all that apply.)

A. It contains the price of shares agreed upon.

B. It contains the total number of shares issued.

C. It does not contain the price of shares agreed upon.

D. It does not contain the total number of shares issued.

7. One way that funds will get a higher return than the market average or a bigger loss than the market average is by leveraging their assets.

A. True

B. False

8. A fund is leveraged at 9.2%. If it has $80,000,000 in its assets, the portfolio would reflect a value of ___.

A. $7,360,000

B. $72,640,000

C. $73,600,000

D. $87,360,000

9. Leveraged funds enhance returns and outperform the market when stocks are going down.

A. True

B. False

10. A mutual fund or a management company must distribute their income ___.

A. annually

B. monthly

C. quarterly

D. weekly

11. A management company distributes its income in a form of ___.

(Select all that apply.)

A. capital gains

B. commissions

C. dividends

D. interest

12. These are capital gains that the management company must distribute at least on an annual basis.

A. capital yield

B. distribution yield

C. dividend yield

D. income yield

13. Dividend yield is the dividend that is paid out from the stocks that the management company owns and then passed through to the investors.

A. True

B. False

14. If you buy a closed-end fund before or close to the record date, your net asset value would decline by the amount of the distribution.

A. True

B. False

15. What would be a good reason for management companies to organize as master limited partnerships?

A. They want to acquire big positions in closed-end funds.

B. They want to avoid the double taxation.

C. They want to decrease their management expenses.

D. They want to increase their management fees.

16.

Series 65 Exam Quiz Mutual Funds 1

This is a Series 65 Exam Lesson 24 Quiz Mutual Funds pt. 1: a free quiz for Series 65 Exam Quiz Mutual Funds 1 which is covering mutual funds pt 1 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 24 Quiz Mutual Funds pt. 1

Series 65 Exam Lesson 24 Quiz Mutual Funds pt. 1 covering more fundamentals of mutual funds you need to understand for the Series 65 Exam

Below are questions based on the lesson 24  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 24 Quiz Mutual Funds pt. 1

1. Which of the following is an example of a mutual fund?

(Select all that apply.)

A. corporate bond fund

B. balanced fund

C. hedge fund

D. junk bond fund

2. Which of the following is an example of an income fund?

(Select all that apply.)

A. 12b-1 fund

B. bond income fund

C. government bond income fund

D. utility stock income fund

3. Which of the following is an example of an open-end fund?

(Select all that apply.)

A. 12b-1 fund

B. accumulated fund

C. fee-based mutual fund

D. no load fund

4. Which of the following is a requirement in putting up an investment management company?

(Select all that apply.)

A. custodian bank

B. financial lawyer

C. investment advisor

D. underwriter

5. It is anybody who has the ability to sponsor the mutual fund.

A. custodian bank

B. investment advisor

C. selling group

D. underwriter

6. It is the document which outlines everything that the client needs to know about the mutual fund.

A. Investment Company Act of 1940

B. investment management company indenture

C. mutual fund contract

D. prospectus

7. Which of the following is contained in the prospectus?

(Select all that apply.)

A. systematic withdrawal plan

B. the name of the investment advisor and the custodian bank and their respective fees

C. the type of mutual fund

D. whether the fund is a diversified fund or not

8. The objectives of the fund is already fixed in the prospectus and can never be changed until all the funds are withdrawn.

A. True

B. False

9. Buying a mutual fund is buying a bond.

A. True

B. False

10. Mutual funds are not traded.

A. True

B. False

11. Mutual funds allow the investor to switch within the family of funds with no sales charge.

A. True

B. False

12. In an open-end fund, there’s a one-time fee that the underwriter will get for selling the shares in that fund.

A. True

B. False

13. No load funds have no ___.

A. asking price

B. bid price

C. net asset value

D. sales charge

14. The maximum sales charge for loaded funds is ___.

A. 6 ¼ % of the net asset value

B. 6 ¼ % of the public offering price

C. 8 ½ % of the net asset value

D. 8 ½ % of the public offering price

15. If a loaded fund chooses to charge the maximum sales charge, it is also required to offer ___.

(Select all that apply.)

A. breakpoints

B. letter of intent

C. principal reinvestment

D. rights of accumulation

16. Which of the following is true about breakpoints?

(Select all that apply.)

A. It can be obtained by investment clubs.

B. It is calculated only for individual investors.

C. It is detailed in the prospectus.

D. There is an increasing sales charge as the dollar amount goes up.

17. The maximum length on the letter of intent is ___.

A. 12 months excluding 30 days backdating

B. 12 months including 30 days backdating

C. 13 months excluding the 90 days backdating

D. 13 months including the 90 days backdating

18. Which of the following is a characteristic of a diversified...

Series 65 Exam Lesson 39 Quiz options pt. 6

This is a Series 65 Exam Lesson 39 Options pt 6: a free quiz for Series 65 Exam Lesson 39 Quiz which is covering Options part 6 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 39 Quiz options pt. 6

Series 65 Exam Lesson 39 Quiz options pt. 6 covering more option strategies you need to understand for the Series 7 Exam

Below are questions based on the lesson 39  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 39 Quiz options pt. 6

1. It is the writing of two calls on the same stock.

A. ratio strategy

B. spread

C. straddle

D. strangle

2. In a ratio strategy, there is an unlimited potential loss on the upside.

A. True

B. False

3. It is the largest options exchange and where options in the United States are traded for the most part.

A. American Stock Exchange

B. Chicago Board Options Exchange

C. Pacific Stock Exchange

D. Philadelphia Stock Exchange

4. It is the subsidiary of Chicago Board Options Exchange where option contracts are cleared.

A. Chicago Options Clearing Company

B. Chicago Stocks and Options Clearing Company

C. Options Clearance Conglomerate

D. Options Clearing Corporation

5. The Chicago Board Options Exchange only issues new options near where the stock is trading at.

A. True

B. False

6. Which of the following are possible strike prices on options for a stock that trades at $300?

A. $260, $280, $300, $320, $340

B. $280, $290, $300, $310, $320

C. $290, $295, $300, $305, $310

D. $295, $297.50, $300, $302.50, $305

7. The minimum increment on option is ___.

A. $0.10

B. $0.25

C. $0.50

D. $1.00

8. Options expire at ___ on the third Friday of the expiration month.

A. 11:59 A.M.

B. 12:00 A.M.

C. 11:59 P.M.

D. 12:00 P.M.

9. This is the price at which you can buy or sell the stock when the stock’s option has already expired.

A. execution price

B. exercise price

C. spot price

D. strike price

10. Specific stocks have specific cycles or months that they trade on.

A. True

B. False

11. An option issued on Cycle ___ is issued only on the months of ___, April, July, and October.

A. 1; January

B. 2; February

C. 3; March

D. 4; January

12. The higher the volatility of the stock, the lower the premium for the time value of its option.

A. True

B. False

13. If you exercise your call option on a Wednesday, you’ll get your stock on ___.

A. Friday

B. Monday

C. Thursday

D. Wednesday – that same day

14. It is a limit on the number of contracts that an individual or a group of individuals acting in concert can acquire.

A. contract limit

B. open interest limit

C. option limit

D. position limit

15. There is a limit on the number of contracts that can be exercised within any five business days.

A. True

B. False

16. Option contracts are NOT adjusted for ___.

A. cash dividends

B. stock splits

C. stock dividends

D. Option contracts are adjusted in all of the above.

17. You hold an option contract for a stock with a strike price of $80 a share for 100 shares. If the stock did a 2 for 1 stock split, then ___.

A. your option would now be for 100 shares with a strike price of $160

B. your option would now be for 200 shares with a strike price of $40

C. your option would now be for 50 shares with a strike price of $80

D. your option would not be affected by the stock split

18. LEAPS are options with terms longer than ___ and have a maximum life of ___.

A. six months; 24 months

B. seven months; 30 months

C. nine months; 36 months

D.

Series 65 Exam Lesson 38 Quiz options pt. 5

This is a Series 65 Exam Lesson 38 Options pt 5: a free quiz for Series 65 Exam Lesson 38 Quiz which is covering Options part 5 . Try it and see how you do if you need help listen the lesson over.

Series 65 Exam Lesson 38 Quiz options pt. 5

Series 65 Exam Lesson 38 Quiz options pt. 5 covering more option strategies you need to understand for the Series 7 Exam

Below are questions based on the lesson 38  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 38 Quiz options pt. 5

1. It is the purchasing and selling of put or call options with different strike prices, different expiration dates, or both.

A. combination

B. spread

C. straddle

D. strangle

2. In a spread, when you close out one position, you are expected to close out the other position at the same time.

A. True

B. False

3. The longer the option, the higher the time value premium.

A. True

B. False

4. As an option approaches its expiration date, the time value on that option reaches its maximum value at the expiration of that option.

A. True

B. False

5. This spread is designed to try to capture the decline of an option’s time value as the option approaches its expiration date.

A. calendar spread

B. long call spread

C. long put spread

D. short call spread

6. Which of the following is bearish?

A. long call spread

B. short call spread

C. short put spread

D. all of the above

7. The maximum profit for a long call spread is the net cost of the spread.

A. True

B. False

8. A short call spread is a credit spread.

A. True

B. False

9. You bought Jan 80 call at $10 and sold Feb 80 call at $20. Stock trades at $100 at expiration. Feb 80 call has $5 time value left. Which is true?

(Note: This transaction is a calendar spread. The expiration mentioned is the expiration of the call option on January.)

A. You shall buy back the February 80 call at $5.

B. You shall buy back the February 80 call at $20.

C. You shall buy back the February 80 call at $25.

D. The February 80 call would expire worthless.

10. You bought Nov 30 call at $3 and sold Dec 30 call at $5. Stock trades at $25 at Nov expiration. Dec 30 call has $1 time value left. Which is true?

(Note: This transaction is a calendar spread.)

A. The November 30 call would expire worthless.

B. The December 30 call would expire worthless.

C. You would have a net profit of $2 by closing your position on the spread.

D. all of the above

11. You bought Mar 60 call at $5 and sold Apr 70 call at $3. This transaction is most probably a ___.

A. long call spread

B. long put spread

C. short call spread

D. short put spread

12. You initiated a long call spread by buying Sept 70 call at $10 and selling Oct 80 call at $5. What is your maximum profit in this transaction?

A. $5

B. $10

C. $15

D. The maximum profit cannot be determined because the stock price is not given.

13. You initiated a long call spread by buying May 100 call at $15 and selling June 85 call at $8. What is your maximum loss in this transaction?

A. $7

B. $8

C. $15

D. $23

14. If you enter into a long call spread, which of the following pair of transactions would give you the greatest possible profit?

A. buying a July 30 call at $5 and selling an August 50 call at $4

B. buying a July 25 call at $6 and selling an August 40 call at $5

C. buying a July 40 call at $9 and selling an August 60 call at $5

D. All of the above transactions have equal maximum profit

15. You initiated a short call spread by buying a Jan 40 call at $4 and selling a Feb 30 call at $7. What is your maximum profit in this transaction?

A.

Series 65 Exam Lesson 37 Quiz options pt. 4

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 37 Quiz options pt. 4

Series 65 Exam Lesson 37 Quiz options pt. 4 covering more option strategies you need to understand for the Series 7 Exam

Below are questions based on the lesson 37  of the series. Choose the letter of the correct answer.

Series 65 Exam Lesson 37 Quiz options pt. 4

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,