Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

Finra Series-7 Exam - Topic 1 Question 17 Discussion

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

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?

Show Suggested Answer Hide 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

Limited Time Offer

25%

Off

Get Premium Series-7 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Fredric
10 months ago
Definitely $700, no doubt about it!
upvoted 0 times
...
Queenie
10 months ago
Wait, how do you get $700? Seems off to me.
upvoted 0 times
...
Tabetha
11 months ago
I thought the put would affect the profit too?
upvoted 0 times
...
Asha
11 months ago
Yeah, so that's $700 minus the total cost!
upvoted 0 times
...
Rory
11 months ago
The call's intrinsic value is $7, right?
upvoted 0 times
...
Antonio
11 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?
upvoted 0 times
...
Holley
11 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?
upvoted 0 times
...
Avery
11 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.
upvoted 0 times
...
Carolynn
11 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.
upvoted 0 times
...
Rueben
11 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.
upvoted 0 times
...
Georgeanna
11 months ago
I'm not so sure about disabling SSLv3—there was something about vulnerabilities, but I can't recall the specifics.
upvoted 0 times
...
Tyisha
11 months ago
I feel like there are multiple commands, but I can't remember if it's `New-UcsSession` or something else entirely.
upvoted 0 times
...

Save Cancel