Session II Assessment

Description

Options Series Session II Assessment
ELITE IIVII
Quiz by ELITE IIVII, updated more than 1 year ago
ELITE IIVII
Created by ELITE IIVII over 6 years ago
57
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Resource summary

Question 1

Question
This is an example of the naming convention of an option. Identify the standards of an option by dragging and dropping the correct label.
Answer
  • Underlying Security
  • Technology
  • Company
  • Purchase Date
  • Expiration Date
  • stock price
  • strike price
  • option type
  • option market
  • premium
  • commission

Question 2

Question
Select the option that lists the differences between stocks and options.
Answer
  • Options are securities, Options are derivatives, & Options trade on national SEC (Securities Exchange Commission)-regulated exchanges.
  • Option 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.
  • Options 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.
  • Options are derivatives, Options have an expiration date, and Options exist only as “book entry,” which means they are held electronically.

Question 3

Question
Label the advantages and disadvantages of options.
Answer
  • Leverage
  • Choices
  • Expiration
  • Not legally enforceable.
  • Fixed Risk
  • Unlimited Risk
  • Limited reward.
  • Unlimited reward.

Question 4

Question
The goal of any option strategy is to buy high and sell low.
Answer
  • True
  • False

Question 5

Question
When does a call buyer benefit?
Answer
  • When the underlying security goes down.
  • When the market is negative.
  • When the market is positive.
  • When the underlying security price rises

Question 6

Question
When does a put option buyer benefit?
Answer
  • When the underlying security's price rises.
  • When the stock market rises.
  • When the stock market declines.
  • When the underlying security's price declines.

Question 7

Question
A put seller benefits when the stock price trades [blank_start]above[blank_end] the option's strike price.
Answer
  • above
  • below
  • near
  • far from

Question 8

Question
The [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.
Answer
  • increases
  • decreases
  • call
  • put

Question 9

Question
The [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.
Answer
  • call
  • put
  • more
  • less
  • strike
  • stock

Question 10

Question
An 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].
Answer
  • strike
  • stock
  • 100
  • 1
  • exercise
  • sells
  • in-the-money
  • out-the-money

Question 11

Question
It 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.
Answer
  • seller's
  • market
  • buyer's
  • chain's

Question 12

Question
Please fill in the blanks for each section marked. Do not include the dollar sign. Enter in the following format: 0.00
Answer
  • 8.00
  • 2.50
  • 1.00
  • 2.75
  • 0.00
  • 5.25

Question 13

Question
On 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].
Answer
  • left
  • right

Question 14

Question
[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.
Answer
  • ITM
  • OTM
  • aggressive
  • expensive

Question 15

Question
In 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)
Answer
  • intrinsic value
  • no value
  • closest
  • farthest
  • extrinsic value
  • market value
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