SIE Exam Lesson 11 Options pt 1 Quiz

SIE Exam Lesson 11 Options pt 1 Quiz

This is a SIE Exam Lesson 11 Quiz  options pt.1which is covering options pt. 1 basic option terminology of call and put options See how you do if you need help listen to the lesson over.

Questions covered include

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

To take the quiz online, click here.

Quiz Options Part 1

1. The oldest recorded option was about _____ getting options on the use of olive presses for a small price and charging olive growers exorbitant price for the use of those olive presses.

A. Nassim Taleb

B. Parmenides of Elea

C. Pythagoras

D. Thales of Miletus

2. It gives the holder or buyer of the option the right to purchase a specific number of shares of stock.

A. call option

B. order option

C. purchase option

D. put option

3. All of the following are needed in evaluating the value of an option EXCEPT ___.

A. expiration date of the option

B. interest rate

C. stock price

D. strike price

4. The premium is the price paid for an option.

A. True

B. False

5. Brokerage firms require same-day settlement on the options that are bought from them.

A. True

B. False

6. In a call option, it is the price at which the stock can be bought.

A. option price

B. option rate

C. stock price

D. strike price

7. Which of the following makes a call option valuable?

A. when the stock price is greater than the strike price after the expiration of the option

B. when the stock price is greater than the strike price before the expiration of the option

C. when the strike price is greater than the stock price after the expiration of the option

D. when the strike price is greater than the stock price before the expiration of the option

8. The more time you have on the option, the more expensive the option becomes.

A. True

B. False

9. In the “in the money option”, the strike price is above the current stock price.

A. True

B. False

10. It is the difference between the strike price and the current stock price when the strike price is lower than the current stock price.

A. absolute value

B. intrinsic value

C. option value

D. par value

SIE Exam Lesson 11 Options pt 1: Cont

11. If the stock price increases before the option expires, the intrinsic value of the option ___.

A. decreases

B. increases

C. remains constant

D. There is no direct relationship between the stock price and the intrinsic value of the option.

12. It is the price paid over the intrinsic value for the time period of the option.

A. premium value

B. premium intrinsic value

C. settlement value

D. time value

13. When the time value of the option declines to zero, what is left to the option at the time of expiration is its ___.

A. intrinsic value

B. par value

C. strike value

D. The time value will never decline to zero.

14. It is the right to sell the stock at a specific price.

A. call feature

B. call option

C. put feature

D. put option

15. In a put option, it is the price at which the stock can be sold.

A. option price

B. option rate

C. stock price

D. strike price

16. If the current price of the stock in the market is $60 and it was offered in a call option at a strike price is $50, what is the intrinsic value of the option?

A. $10

B. $110

C. $5

D. $55

17. An option that has expired loses its intrinsic value.

A. True

B. False

18. If you bought a call option at a premium of $18 to buy a stock at $50 that is now selling in the market at $60, how much did you pay for the time value?

A. $10

B. $18

C. $8

D. $9

19. If the current price of the stock in the market is $60 and the strike price is $50 in a put option, what is the intrinsic value of the put option?

A. $5

B. $10

C. $55

D. The put option has no intrinsic value.

20. What value does an out of the money put option has?

A. intrinsic value only

B. time value only

C.