SIE Exam Lesson 11 Options pt 1 Quiz

02/03/22 • 10 min

SIE Exam: Securities Industry Essentials Exam Lessons and Information

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.

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SIE Exam Lesson 10 Free Quiz: Credit Default Swaps, Adjustable Rate Securities and SPV’s

This is a SIE Exam Lesson 10 Free Quiz which is covering Credit Default Swaps, Adjustable Rate Securities and SPV'. Try it and see how you do if you need help listen to the lesson over. SIE SIE Exam Lesson 10 Free Quiz This is a SIE Exam Lesson 10 Free Quiz which is coveringCredit Default Swaps, Adjustable Rate Securities and SPV's. Try it and 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. 1. Which of the following are derivative type products? (Select all that apply.) A. auction rate securities B. credit default swaps C. exchange-traded notes D. market index-linked CDs 2. The reason you would buy a credit default swap if you are a speculator is you expect the credit worthiness of a company to ___. A. go up B. go down C. be constant D. be the same as the leading index on the market 3. Credit default swaps are traded ___. A. on floors B. on the primary market C. on the secondary market D. over-the-counter 4. There is no limit to the number of credit default swaps that can be written on any specific position. A. True B. False 5. It is a credit default swap used as a hedge vehicle for a position. A. covered CDS B. indexed CDS C. married CDS D. naked CDS 6. It is a credit default swap for bonds that you speculate on but do not own. A. covered CDS B. indexed CDS C. married CDS D. naked CDS 7. How much would you pay for a credit default swap of a $50,000 worth of bonds that has a spread of 25 basis points? A. $125 B. $200 C. $2,000 D. $12,500 8. In a Dutch auction, a person actually puts back the bond to the issuer. A. True B. False 9. It is the lowest rate where there are enough purchasers willing to buy all the auctionable securities at a Dutch auction. A. auction rate B. clearing rate C. interest rate D. market rate 10. In a Dutch auction, the clearing rate is reset ___. A. every 7 days B. every 28 days C. every 35 days D. based on whatever is set in the offering circular or official statement SIE Exam Lesson 10 Free Quiz: Continued 11. In a Dutch auction, bids higher than the clearing rate will be able to buy the bonds. A. True B. False 12. Which of the following happens in the case of a failed auction? (Select all that apply.) A. There are so many people putting back their bonds but so few people buying them. B. There is no enough interest that develops in the market. C. People could not get out of their positions. D. People hold on to their auction rate securities at the minimum yield that was put in the bond covenant. 13. Which of the following are the risks in auction rate securities? (Select all that apply.) A. counterparty risk B. credit risk C. marketability risk D. suitability risk 14. Which of the following is true in a market index-linked CD? (Select all that apply.) A. These are CDs with a yield equivalent to a portion of an index. B. If the market goes up, you will participate equally on how much the upside of the market is. C. If the market goes down, you are guaranteed that your principal will not fall below par. D. If the bank issuing the CD goes bankrupt and the CD is not federally insured, you will not get back your principal. 15. If you don’t hold on to a market index-linked CD until maturity, you’re entitled to participate in its upside as long as the CD is FDIC insured. A. True B. False 16. Which of the following are risks in a market index-linked CD? (Select all that apply.) A. counterparty risk B. credit risk C. market risk D. principal risk 17. In a market index-linked CD, you can only lose principal if the institution issuing the CD goes bankrupt. A. True B. False 18. Which of the following are risks in an exchange-traded note? (Select all that apply.) A. counterparty risk B.

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SIE Exam Lesson 12 Options pt 2 Quiz

SIE Exam Lesson 12 Options pt 2 SIE Exam Lesson 12 Options pt 2 This is a SIE Exam Lesson 12 Options pt 2 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 2 Below are questions based on the previous lesson. Choose the letter of the correct answer. To take the quiz online, click here. 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 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. SIE Exam Lesson 12 Options pt 2 Cont: 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 and you write a covered call for $40 a share, there is ___. A. $10 in the money option B. $10 out of the money option C. $30 in the money option D. $40 out of the money option 20. You bought a married put with a strike price of $15. If the current price of the stock is $20, what is the intrinsic value of the option? A. $2.5 B. $5 C. $10 D. There is no intrinsic value in this option. We hope you did well on this SIE Exam Lesson 12 Options pt 2