Exercise

Answer the following questions.

1. 1. For options traders, bullish positions include which of these positions:
2. I. Buying calls
3. II. Selling calls
4. III. Buying puts
5. IV. Selling puts
6. A. I and III
7. B. I and IV
8. C. II and III
9. D. II and IV
10. 2. XYZ Jan 55 calls currently sell out of the money. They may be bought in the market at a $2 premium. The going price of this option represents:
11. A. Intrinsic value only
12. B. Time value only
13. C. Both intrinsic and time value
14. D. Time value minus intrinsic value
15. 3. Which of the following options is most likely to be furthest from its expiration date?
16. A. XYZ Mar 30 put @ 4, XYZ is trading at $28.95
17. B. XYZ Mar 30 call @ 5, XYZ is trading at $31.05
18. C. XYZ Mar 30 put @ 4, XYZ is trading at $32.75
19. D. XYZ Mar 100 call @ 5, XYZ is trading at $102.90
20. 4. Listed options are issued and guaranteed by:
21. A. Options Clearing Corporation
22. B. Chicago Board Options Exchange
23. C. Companies that issue the securities
24. D. Exchange where the option is listed
25. 5. FINRA has a 25,000 position limit for FINRA members that are not members of an options exchange for calls and puts. Which of the following positions held by a customer would violate the FINRA 25,000 position limit on Acme contracts?
26. A. Long 2,000,000 shares of Acme and short 10,000 calls on Acme
27. B. Long 20,000 calls on Acme and long 10,000 puts on Acme
28. C. Short 20,000 puts on Acme and long 10,000 Acme stock
29. D. Short 20,000 puts on Acme and long 10,000 calls on Acme
30. 6. Which of the following statements about open interest is not true?
31. A. Open interest changes throughout the trading day.
32. B. Open interest is generally higher when the stock price is near the strike price and lower as the stock prices deviates from the strike.
33. C.