Finra Series-7 Exam - Topic 1 Question 17 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 17
Topic #: 1

Bubba buys one XYZ November 65 call at $3 and one XYZ November 65 put at $2. XYZ is trading at $72. The put expires and the call is closed at its intrinsic value.

What is the resulting profit?

A$200

B$300

C$500

D$700

Show Suggested Answer

Suggested Answer: A

$200. Since XYZ is trading at 72, a November 65 call has an intrinsic value of $700. A sale at that value compared to the cost of $300 is a profit of $400. Subtract the loss of $200 on the expired put to obtain the profit of $200.

by Selma at May 08, 2022, 08:14 AM

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Fredric

4 months ago

Definitely $700, no doubt about it!

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Queenie

4 months ago

Wait, how do you get $700? Seems off to me.

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Tabetha

4 months ago

I thought the put would affect the profit too?

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Asha

4 months ago

Yeah, so that's $700 minus the total cost!

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Rory

5 months ago

The call's intrinsic value is $7, right?

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Antonio

5 months ago

If the call is worth $7 and we paid $3 for it, that gives us a $4 profit, but then we lost $2 on the put. So, is it $200 or $300 total?

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Holley

5 months ago

I'm a bit confused about how to handle the put since it expires worthless. Does that mean we just focus on the call's profit?

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Avery

5 months ago

I remember a similar question where we had to calculate profits from both a call and a put. I think we need to subtract the premiums paid from the intrinsic value.

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Carolynn

5 months ago

I think the call's intrinsic value is $7 since the stock is at $72, but I'm not sure how to factor in the costs.

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Rueben

5 months ago

This seems like a straightforward question about identifying high-risk seniors. I'll focus on the key terms like "case management" and "geriatric evaluation" to determine the best approach.

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Georgeanna

5 months ago

I'm not so sure about disabling SSLv3—there was something about vulnerabilities, but I can't recall the specifics.

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Tyisha

5 months ago

I feel like there are multiple commands, but I can't remember if it's `New-UcsSession` or something else entirely.

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