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Finra Series-7 Exam - Topic 1 Question 17 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 17
Topic #: 1
[All Series-7 Questions]

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?

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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
5 months ago
Definitely $700, no doubt about it!
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Queenie
6 months ago
Wait, how do you get $700? Seems off to me.
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Tabetha
6 months ago
I thought the put would affect the profit too?
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Asha
6 months ago
Yeah, so that's $700 minus the total cost!
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Rory
6 months ago
The call's intrinsic value is $7, right?
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Antonio
6 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
6 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
6 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
6 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
6 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
6 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
6 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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