Quiz
Session II Assessment
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Questions in this quiz (15)
1This is an example of the naming convention of an option. Identify the standards of an option by dragging and dropping the correct label.
- AUnderlying Security
- BTechnology
- CCompany
- DPurchase Date
- EExpiration Date
- Fstock price
- Gstrike price
- Hoption type
- Ioption market
- Jpremium
- Kcommission
2Select the option that lists the differences between stocks and options.
- AOptions are securities, Options are derivatives, & Options trade on national SEC (Securities Exchange Commission)-regulated exchanges.
- BOption orders are transacted through market makers and retail participants with bids to buy and offers to sell and can be traded like any other security.
- COptions trade on national SEC (Securities Exchange Commission)-regulated exchanges, Options have an expiration date, and There is no limit to the number of options that can be traded on an underlying stock.
- DOptions are derivatives, Options have an expiration date, and Options exist only as “book entry,” which means they are held electronically.
3Label the advantages and disadvantages of options.
- ALeverage
- BChoices
- CExpiration
- DNot legally enforceable.
- EFixed Risk
- FUnlimited Risk
- GLimited reward.
- HUnlimited reward.
4The goal of any option strategy is to buy high and sell low.
- ATrue
- BFalse
5When does a call buyer benefit?
- AWhen the underlying security goes down.
- BWhen the market is negative.
- CWhen the market is positive.
- DWhen the underlying security price rises
6When does a put option buyer benefit?
- AWhen the underlying security's price rises.
- BWhen the stock market rises.
- CWhen the stock market declines.
- DWhen the underlying security's price declines.
7A put seller benefits when the stock price trades [blank_start]above[blank_end] the option's strike price.
- Aabove
- Bbelow
- Cnear
- Dfar from
8The [blank_start]call[blank_end] option becomes more valuable when the stock price [blank_start]increases[blank_end] higher above the call's strike price.
- Aincreases
- Bdecreases
- Ccall
- Dput
9The [blank_start]call[blank_end] option becomes [blank_start]more[blank_end] valuable when the stock price increases higher above the [blank_start]strike[blank_end] price.
- Acall
- Bput
- Cmore
- Dless
- Estrike
- Fstock
10An option's [blank_start]strike[blank_end] price indicates the purchase/sale price of [blank_start]100[blank_end] shares of stock (per option contract) in the event that the option buyer [blank_start]exercise[blank_end]s, or the option expires [blank_start]in-the-money[blank_end].
- Astrike
- Bstock
- C100
- D1
- Eexercise
- Fsells
- Gin-the-money
- Hout-the-money
11It is said that time decay is an option [blank_start]seller's[blank_end] best friend and option [blank_start]buyer's[blank_end] worst enemy.
- Aseller's
- Bmarket
- Cbuyer's
- Dchain's
12Please fill in the blanks for each section marked. Do not include the dollar sign. Enter in the following format: 0.00
- A8.00
- B2.50
- C1.00
- D2.75
- E0.00
- F5.25
13On an option chain, the calls are usually on the [blank_start]left[blank_end] and the puts are on the [blank_start]right[blank_end].
- Aleft
- Bright
14[blank_start]ITM[blank_end] options are always going to be more conservative, but also more [blank_start]expensive[blank_end] since they will always have some real value priced into the option. [blank_start]OTM[blank_end] options will always be cheaper but more [blank_start]aggressive[blank_end] since the entire price of the option is based on time value.
- AITM
- BOTM
- Caggressive
- Dexpensive
15In The Money: Any option with [blank_start]intrinsic value[blank_end] (real value)
At The Money OR Near The Money: An option with a strike price that is [blank_start]closest[blank_end] to the current stock price
Out The Money: An option that only has [blank_start]extrinsic value[blank_end] (time value)- Aintrinsic value
- Bno value
- Cclosest
- Dfarthest
- Eextrinsic value
- Fmarket value
Information
- Description
- Options Series Session II Assessment
- Author
- Deleted user
- Language
- English
- Views
- 9
- History
- Created on 15 May 2019 · updated on 15 May 2019
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